President Donald Trump said on Monday that the United States and India have reached an agreement on a trade framework that cuts U.S. tariffs on Indian goods and commits New Delhi to expand purchases of U.S. oil and gas, pushing energy supply to the center of talks that have unfolded largely in public.
Trump’s comments outlined a deal that lowers U.S. tariffs on Indian imports to 18% and removes an additional duty tied to India’s Russian oil buying. In return, he said Prime Minister Narendra Modi agreed to sharply reduce purchases of Russian crude and shift toward U.S. supply, alongside broader commitments to buy American energy, technology, and agricultural products. Indian officials have not yet confirmed the details or timelines.
The focus on oil reflects India’s role as one of the largest buyers of Russian crude since 2022, a trade that has reshaped tanker flows and underpinned refinery margins. Washington has increasingly treated that relationship as a political issue rather than a purely commercial one, using trade pressure to push New Delhi toward alternative sourcing.
Trump also said India would be allowed to buy oil from Venezuela, presenting it as a substitute for Russian and Iranian barrels. The remark suggested potential flexibility on sanctions enforcement, though no formal policy change has been announced. Venezuela remains under U.S. sanctions, with oil exports governed by limited licenses, and it remains unclear whether any India-specific authorization has been granted or whether the comment reflected negotiating posture.
The timing is notable. India’s crude imports are running near record levels, with January volumes set to be the highest on record as refiners respond to strong domestic demand and export fuel, according to Oilprice.com. Russian grades continue to dominate incremental supply because of price, while U.S. crude has struggled to compete without discounts or logistical incentives.
Liquefied natural gas is also included in the trade framework. India remains short of natural gas and exposed to volatile spot LNG prices as it continues to seek lower-cost, long-term supply contracts. U.S. exporters see India’s growing power demand as a potential outlet, but pricing terms have yet to be agreed.
By Charles Kennedy for Oilprice.com
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