India boosts oil imports from US, UAE as Russian supplies come under pressure

By: Team India Tracker

India imports more than 85% of its oil, and officials maintain that refiners are free to source the most economical grades, provided they steer clear of sanctioned suppliers such as Iran and Venezuela.

India’s refiners sharply increased purchases of crude oil from the US and the UAE in August, with imports from both countries hitting multi-year highs. The shift reflects tighter access to Russian barrels, renewed US trade pressure, and the need to secure reliable alternatives.

India imported nearly 400,000 barrels per day (bpd) of US crude last month, according to data from shipping tracker Kpler. That was the highest since November 2022, when imports averaged 486,000 bpd, and marked a sharp rise from 166,000 bpd in July and 222,000 bpd a year earlier.

Most of these shipments were light, sweet grades such as WTI Midland, which are typically booked months in advance to account for longer voyage times. “US oil is usually an opportunistic buy,” R Ramachandran, former head of refining at Bharat Petroleum, told a financial daily.

UAE Supplies Surge Too

Shipments from the UAE climbed to 532,000 bpd in August—the strongest since May 2022—representing a 24 per cent jump from a year earlier and a 12 per cent increase from July. Refining executives say the UAE’s Murban crude has become a crucial substitute for Russia’s Urals, which once dominated India’s import basket.

“Murban is a natural replacement for Urals, and US light grades are ideal for blending with heavier oils,” said a senior trader at a state-run refiner.

Trade Tensions Shape Energy Flows

The spike in US imports coincides with fresh trade talks between New Delhi and Washington. Industry Minister Piyush Goyal has said he is optimistic about sealing a bilateral agreement by November, with energy—crude and LNG—expected to be a cornerstone of any deal.

For the US, higher oil exports to India also help address its $40.9 billion trade deficit with the country, long a source of friction. India imported $45.6 billion worth of goods from the US in FY25, including $6.4 billion of crude between January and July. Additional volumes this year alone, priced at an average $79.3 a barrel, are valued at $1.2 billion.

Russia Still Dominates

Despite diversifying, India still leans heavily on Russia. Between January and August, Moscow supplied about 1.5 million bpd, making up 37 per cent of total imports. That was only 14 per cent below the average of 1.75 million bpd earlier this year, even after Washington imposed secondary sanctions in July and the European Union tightened restrictions.

Russian supplies in the first eight months of 2025 were down just 3.3 per cent from a year earlier, while US flows rose 26 per cent and UAE volumes gained 22 per cent, Kpler data show.

Price Matters Most

On a landed basis, Russian crude remains the cheapest option. Between January and July, Urals averaged $71.3 a barrel, compared with $78.3 for UAE grades and $79.3 for US oil, according to government trade data.

Discounts on Urals have narrowed to about $2.50 a barrel—roughly half of last year’s average—but Russian oil continues to offer savings. That explains why Moscow remains New Delhi’s top supplier, even as refiners seek alternatives.

Split Strategies Among Refiners

State-run companies such as Indian Oil and Bharat Petroleum have leaned on US and UAE grades to plug the gap left by tighter Russian flows. By contrast, Reliance Industries and Rosneft-backed Nayara Energy—both with complex refining setups — have continued to buy Russian barrels in bulk, supplementing them with heavy, sulphur-rich Canadian crude.

Market Dynamics Drive Buying

Part of August’s jump in US imports was driven by global price shifts. Brent futures slipped below Dubai swaps for the first time in four months, making trans-Atlantic crude arbitrage into Asia more profitable, according to market intelligence provider Argus.

Indian refiners seized the opportunity. Indian Oil and Bharat Petroleum together bought at least 6 million barrels of WTI crude for November delivery, Argus reported.

India sources more than 85 per cent of its oil from overseas, and officials insist refiners are free to buy whichever grades are most economical, provided they avoid sanctioned suppliers such as Iran and Venezuela.

Russia remains the lowest-cost choice, but August’s record inflows from the US and UAE show how Indian refiners are diversifying supply to guard against sanctions, trade disputes, and shifting geopolitics.