India Broadens Crude Oil Sourcing as US Imports Rise, Russian Volumes Hold Steady

Key Highlights

1. Indian crude basket price fell $12 YoY to $72/barrel in March 2025.
2. Russian imports remain strong but are less discounted than before.
3. U.S. and Middle East crude imports rose sharply in early 2025.
4. Indian refiners pursue logistics efficiency through diversified sourcing.

Indian Crude Basket Sees Notable Price Drop

• India’s average crude oil import price—known as the Indian crude basket—has witnessed a significant decline, dropping from $84 per barrel in March 2024 to $72 per barrel in March 2025, as per the Reserve Bank of India (RBI) FY25 annual report. This drop is attributed to both the softening of global crude oil prices and diversification of sourcing by Indian refiners.
• The price competitiveness of Russian crude, once driven by steep discounts amid sanctions, has begun to narrow. As discounts shrink and global prices stabilize, Russian barrels are no longer as cost-attractive as they were over the past two years. Nevertheless, freight cost savings—due to direct deliveries from Russia—still offer pricing advantages.

Supply Diversification Gains Momentum in 2025

India’s crude demand continues to grow, with refiners seeking diversified, cost-effective, and timely sources. In the first five months of 2025:

• Russian crude imports remained strong at 1.9 million barrels per day (mbd), marginally above the 2024 average of 1.77 mbd.
• US crude imports surged, rising from 145 kbd in February to 337 kbd in April 2025, reflecting expanding energy ties post Prime Minister Modi’s visit to Washington.
• Middle East crude imports grew to 2.28 mbd, up from 2.12 mbd in the same period last year.
• Indian refiners are also exploring West African grades for shorter delivery times and better logistics.

Although US oil imports are increasing, delivery time remains a constraint—taking up to 40 days versus 25 days from Russia and just 4–5 days from the Middle East. This reinforces the strategic need for regional balance and flexibility in sourcing.

Russia, U.S., and Middle East Drive Import Strategy

• India has increased crude imports from the United States without significantly reducing intake from Russia. This shift comes amid changing geopolitics and trade discussions, including renewed efforts to boost India–US energy cooperation.
• Russia’s overall share in India’s crude basket has slightly dipped due to less aggressive pricing and reduced discounts, though logistical advantages remain. As a counterbalance, imports from the Middle East and West Africa are increasing, providing Indian refiners with more agile options amid fluctuating market conditions.
• With OPEC continuing to cut supplies to support prices, India’s ability to source crude from multiple regions has proven effective in managing risks and containing inflationary pressures.

Experts Opinion: Regional Flexibility Helps India Offset OPEC Cuts

Going forward, the Indian crude oil market is expected to:

• Continue diversifying its supply sources to manage cost and logistics effectively.
• Leverage geopolitical partnerships, especially with the US, for long-term energy security.
• Maintain steady imports from Russia, depending on the price competitiveness and freight benefits.
• See greater Middle East engagement, given its geographic and logistical advantages.