(MENAFN- KNN India) New Delhi, Jul 11 (KNN) India's crude oil imports from the United States increased substantially in the first half of 2025, rising 51 percent to 271,000 barrels per day compared with 180,000 barrels per day during the same period in 2024, according to data from S&P Global Commodity Insights.

The growth represents a notable shift in India's energy sourcing strategy as the country seeks to diversify its crude oil supply chain.

Crude shipments from Brazil demonstrated even stronger growth, surging 80 percent year-on-year to 73,000 barrels per day from 41,000 barrels per day in the first half of 2024.

This expansion reflects India's broader initiative to reduce dependence on traditional suppliers and explore alternative energy partnerships with non-OPEC nations.

The increased imports from the United States have been concentrated among a limited number of Indian refiners, creating potential for further expansion.

"Crude supplies from the US have been rising but have been limited to a few refiners in India. This allows room for other refiners to grow US imports further during the year," said Abhishek Ranjan, South Asia oil research lead at S&P Global Commodity Insights.

Market dynamics have created favourable conditions for India's increased US crude purchases. Reduced Chinese imports of American crude oil, attributed to higher tariffs, have opened opportunities for India to simultaneously increase its energy imports and reduce its trade deficit with the United States.

Diplomatic initiatives have supported the expansion of crude imports from Brazil. Petroleum Minister Hardeep Singh Puri visited Brazil in 2024 to explore energy cooperation opportunities, including increased crude imports and collaboration on deepwater exploration projects.

Prime Minister Narendra Modi is scheduled to visit Brazil later this month, potentially furthering these energy partnerships.

The recovery in US crude flows marks a reversal of previous trends. Indian refiners had previously imported significant volumes of American crude but reduced purchases over the past two to three years as Russia became a primary supplier.

The recent increase in US imports follows Prime Minister Modi's February visit to the United States, where discussions with American leadership focused on strengthening bilateral energy ties.

Trade policy considerations have also influenced import patterns. The United States announced reciprocal tariffs on India and other countries on April 2 but suspended the increase for 90 days beginning April 10 to allow time for negotiations between the trading partners.

Despite the diversification efforts, Russia maintained its position as India's largest crude oil supplier during the January-June 2025 period. Russian crude shipments totalled 1.67 million barrels per day, slightly higher than the 1.66 million barrels per day recorded in the same period of 2024, according to Commodities at Sea data from S&P Global.

"Volumes are rising again, supported by lower crude prices that enable higher volumes to be procured below the price cap. As the global oversupply is expected to continue putting pressure on prices, we expect Russian flows to remain at current levels, if not increase," Ranjan noted.

Price dynamics have affected Russian crude availability. Spot FOB Primorsk Urals crude exceeded the G7-imposed USD 60 per barrel price cap during the Israel-Iran conflict, crossing the threshold on June 13 and remaining above it until June 24. Platts assessed Urals FOB Primorsk at USD 56.32 per barrel on July 1.

India's crude import portfolio showed mixed trends from other traditional suppliers during the six-month period. Imports from Iraq declined 4 percent while Saudi Arabian crude shipments fell 2 percent compared to the previous year.

Angola experienced a more significant 22 percent decrease in crude exports to India, while Nigeria increased shipments by 26 percent to 158,000 barrels per day.

The outlook for Nigerian crude imports may face challenges due to domestic developments.

"Gradually rising crude throughput in Dangote refinery will mean that those Nigerian crudes will not be able to support crude demand growth from India. There might be a few months of higher crude imports, but they should decline on an annual basis in terms of imports to India," Ranjan explained.

The data reflects India's strategic approach to energy security through supply diversification while maintaining cost-effective procurement practices.

The country's refiners continue to balance geopolitical considerations with economic factors in their crude oil sourcing decisions as global energy markets remain volatile.

(KNN Bureau)

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