India’s New Crude Oil Strategy: Middle East on Focus

Recently, the Biden administration forced a few new sanctions on the Russian oil producers Gazprom Neft and Surgutneftegas, along with 180 tankers shipping Russian oil. The Biden administration did this to suppress Moscow’s revenue, which was used to finance the Ukraine war. These new sanctions also disrupted the Russian shadow fleet. 

After this move from the U.S., India will likely diversify its crude oil sources and lean towards the Middle East. The lead analyst at Yes Securities, Hitesh Jain, spoke on the matter, stating, “India would look at diversifying its sources of imports as sanctions (on Russia) increase. After Russia, the biggest basket for India in the Middle East and logistically the region is proximal to use, which means transportation cost would be relatively lower than other sources of import.” Currently, India imports 30% of its required crude oil from Russia. 

A government official told reporters India will continue with the Russian oil supply for the next two months as the U.S.-sanctioned tankers are allowed to discharge oil until March. However, after that, India wouldn’t import crude from the Sanctioned Russian Entities. 

Also Read: India To Surpass Japan and Germany In Economic Growth 

The share of Russian oil in India’s imports has decreased recently. In December 2024, India’s oil imports from Russia were the lowest of the year, falling to 1.48 million barrels per day. This is a 17% decrease from November when India imported 1.78 BPD. The fall was driven by rising domestic demand from Moscow. Due to this, Indian refiners turned to traditional Middle Eastern suppliers like Iraq and Saudi Arabia to meet the requirements.  

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