India’s Crude Oil Imports Surge 4.7% in February, Domestic Production Declines 5.1%

Key Highlights

• Crude oil prices rebound on the back of OPEC+ cuts and U.S. sanctions on Iran, signaling tightening global supply.
• India’s crude output continues to underperform, down 5.1% YoY in February, raising import dependency to 89.4%.
• Oil import bill rises to $9.7 billion, driven by higher reliance on foreign crude amid sluggish domestic production.
• Natural gas consumption growth remains muted, challenging India's goal of increasing gas share in the energy mix.

Brent and WTI crude prices see modest gains

• Brent crude oil is currently trading at $72.28 per barrel, reflecting a 0.39% increase. Today’s opening price was $72.39 per barrel, while it closed yesterday at $72.00 per barrel.
• Meanwhile, WTI crude oil is trading at $68.36 per barrel, up by 0.43%. It opened today at $68.35 per barrel and closed yesterday at $68.07 per barrel. 
• Both benchmarks show modest gains, indicating a positive trend in crude oil prices.
• In Panipat, Refinery Bitumen (VG30) is priced at ₹47,262 per metric ton, while in Mathura, Roadgrip Bitumen Emulsion (RS 1) stands at ₹33,810 per metric ton. 
• In Delhi, Base Oil (SN150) is available at ₹67 per kilogram, and Lubriedge Rubber Process Oil (Paraffinic 245) is priced at ₹72 per liter. 
• Meanwhile, in Mundra, Fuel Oil (Virgin 180cST Furnace Oil) is trading at ₹47.5 per kilogram.

India’s domestic crude production dropped 5.1% YoY in February 2025

• India's crude oil production witnessed a 5.1% decline in February 2025, totaling 2.2 million metric tons (mmt). This shortfall continues the trend of declining domestic production due to the natural depletion of mature oil fields. 
• As a result, India's upstream companies are projected to miss the 2024-25 crude oil production target of 28.5 mmt, with actual production standing at 24.2 mmt till February.
• The largest contributor, ONGC, reported 1.3 mmt of crude production in February, lower than 1.4 mmt last year. Similarly, Oil India produced 0.3 mmt, and private operators contributed 0.6 mmt.
• To compensate for the shortfall, crude oil imports rose by 4.7%, increasing India's dependence on foreign oil to 89.4% for the month. The total net oil and gas import bill surged to $9.7 billion, surpassing the $9.4 billion import bill of February 2024. 
• Of the total imports, crude oil accounted for $10.6 billion, LNG for $1.3 billion, while exports stood at $3.9 billion.
• Meanwhile, India’s natural gas consumption increased by just 0.6%, reaching 5,789 million metric standard cubic meters (mmscm). While gas consumption grew by 9.1% year-on-year to 66,975 mmscm, the pace of growth remains sluggish compared to India's target of a 15% gas share in the energy mix by 2030.

Petroleum News: Oil imports surged, raising import dependence to 89.4%

• Oil futures are rallying as fresh U.S. sanctions on Iran and OPEC+ production cuts tighten global crude supply, pushing prices higher. Technical indicators suggest further upside potential for crude oil. 
• Brent crude is trading around $72 per barrel, with benchmarks consolidating weekly gains. Oil prices are on track for a second consecutive weekly increase, driven by supply concerns stemming from the sanctions and OPEC+ output plans.
• In Nigeria, the federal government has formed a panel to address challenges in the naira-for-crude agreement with the Dangote Refinery. The Nigerian National Petroleum Company Limited (NNPCL) is facing difficulties in maintaining the deal due to crude oil allocations to foreign creditors, straining the arrangement.
• Meanwhile, crude oil prices are set for another weekly gain, supported by OPEC+ efforts to control production and U.S. sanctions targeting Iran's energy sector. Brent crude has climbed above $72 per barrel, marking its third consecutive session of gains. The sanctions have also impacted Chinese refiners, further tightening global supply.
• Despite a seasonal build in inventories, analysts suggest an important buy signal for crude oil may be imminent. While gold prices have retreated from recent highs, WTI crude oil continues to recover, reflecting ongoing market optimism about tightening supply and geopolitical tensions.

Expert Opinion and Future Outlook

• India's crude oil import dependence is expected to remain high as domestic production struggles due to the natural decline of mature oil fields. The Oilfields (Regulation and Development) Act may drive fresh investment in upstream exploration, but short-term output gains remain unlikely.
• For natural gas, demand growth is slow, challenging India’s gas-based economy ambitions. However, the market expects an improved global gas supply by 2027, which could ease availability constraints and support long-term energy security.