US Crude Exports to India Surge to Over Two-Year High Amid Russia Sanctions

Indian Refiners Boost Purchases of US Oil as Russian Supply Tightens

India’s crude oil imports from the United States surged to a two-year high in February 2024, as tighter U.S. sanctions on Russian oil producers and shipping companies prompted Indian refiners to seek alternative supplies. According to ship tracking data from Kpler, the U.S. exported approximately 357,000 barrels per day (bpd) of crude oil to India last month—a significant jump from 221,000 bpd recorded in February 2023.

This sharp rise in crude imports from the United States—the world’s largest oil producer—underscores how Washington’s escalating sanctions on Russian and Iranian oil have disrupted global energy trade flows, forcing major buyers, including India, to diversify their energy sources.

US-India Energy Trade Strengthens Amid Geopolitical Shifts

India, the world’s third-largest oil importer and consumer, has been strategically expanding its energy partnership with the US. In February 2024, Indian officials stated that the country’s energy imports from the U.S. could rise to $25 billion in the near future, up from $15 billion in 2023.

This shift comes as Western nations, led by the U.S., tighten economic pressure on Russia following its continued invasion of Ukraine. The latest rounds of sanctions on Russian oil and shipping companies, particularly those involved in transporting Urals crude to Asia, have made it increasingly difficult for Indian refiners to secure stable Russian supplies.

Why Are Indian Refiners Turning to US Crude?

The primary drivers behind the spike in US crude exports to India include:

• Stricter US Sanctions on Russian Oil Trade: The U.S. has recently targeted Russian shipping fleets and oil trading intermediaries, making it harder for Indian refiners to import Russian crude.
• Need for Light-Sweet Crude: Indian refiners are increasingly looking for light-sweet crude oil, which is easier to process and yields higher-value refined products like gasoline and diesel. West Texas Intermediate (WTI) Midland crude, a high-quality U.S. oil grade, has become an attractive option.
• Energy Diversification Strategy: With Russia under heavy sanctions and Middle Eastern supplies facing geopolitical risks, India is actively seeking a broader mix of suppliers to ensure stable imports.

According to Rohit Rathod, senior analyst at Vortexa, “Indian refiners are trying to diversify their crude supplies, especially light-sweet barrels. Sanctions on Russian vessels that came in recently only pushed Indian buyers to look elsewhere.”

Players in the India-US Crude Trade

Data from Kpler highlights that approximately 80% of the US crude exported to India was WTI Midland, a high-quality crude grade well-suited for India’s refining infrastructure.

Top Buyers of US Crude in India:

• Indian Oil Corporation (IOC)
• Reliance Industries Limited (RIL)
• Bharat Petroleum Corporation Limited (BPCL)

Major US Crude Exporters:

• Occidental Petroleum
• ExxonMobil
• Equinor
• Trading House Gunvor

Neither the Indian refiners nor the U.S. oil producers provided immediate comments on the increased trade flows.

Impact of US Sanctions on Global Crude Flows

Beyond India, US crude exports to South Korea also hit a record high of 656,000 bpd in February 2024. The increase came after China imposed a 10% tariff on U.S. crude imports, prompting traders to divert shipments to alternative Asian markets.

Meanwhile, US crude exports to China dropped sharply to just 76,000 bpd—one of the lowest levels in five years. This decline reflects shifting trade routes as U.S.-China economic tensions persist.

What This Means for India’s Oil Market

With Russian oil imports facing increasing logistical and financial hurdles, India’s dependence on US crude is expected to grow in 2024. While Russia remains India’s top oil supplier, the recent developments indicate that New Delhi is proactively securing diversified energy sources to hedge against future disruptions.

For now, the US-India energy trade is set for expansion, reinforcing the growing economic ties between the two nations amid an evolving global oil market.