Trade, tariffs, and oil: how the US is affecting India’s energy market
11 February 21:42
India is considering increasing crude oil purchases from the US and Venezuela amid growing pressure from Washington and negotiations on a broader trade agreement with the United States. This was reported by Bloomberg , citing sources in the energy industry, according to "Komersant Ukrainian".
According to the agency’s interlocutors, the Indian government has asked state-owned oil refineries to explore the possibility of increasing imports from alternative sources, primarily American and Venezuelan oil.
Political background
The issue of oil imports has been in the spotlight after US President Donald Trump said that India had agreed to stop buying Russian crude oil as part of a trade deal. New Delhi hasn’t officially confirmed these claims.
At the same time, the US directly links energy cooperation with trade concessions. Trump previously lifted 25% tariffs on Indian imports, which were imposed precisely because of purchases of Russian oil, and threatened to impose tariffs on countries that continue to trade with Iran.
What refineries are offering
According to Bloomberg, state-owned refineries are advised to:
- give priority to American oil grades when purchasing on the spot market through tenders;
- consider Venezuelan oil, but mainly through private agreements with traders.
Indian companies have already made their first purchases of Venezuelan crude oil through Vitol and Trafigura, traders that the Trump administration brought in after establishing US control over Venezuela’s energy sector.
Economic and technical constraints
Despite political interest, India’s options for imports from the US and Venezuela are clearly limited.
American oil is predominantly light, while most Indian refineries were designed to process medium grades. This reduces the technological efficiency of processing.
In addition, transporting oil from the US is expensive due to the long sea distances involved. India has cheaper and geographically closer alternatives, particularly from West African countries and Kazakhstan.
According to estimates by refinery managers, Indian refineries could theoretically receive up to 20 million tons of American oil per year (about 400,000 barrels per day) — more than last year, but still not enough to completely replace volumes from Russia.
India’s official position
New Delhi publicly emphasizes that its strategy is not to abandon a specific supplier, but to diversify its sources. Energy security remains a key priority, especially against the backdrop of geopolitical instability and rising global prices.
At the same time, India is demonstrating its readiness to combat shadow oil flows: on February 7, the country’s coast guard intercepted three tankers as part of an operation against an international oil smuggling syndicate.
