Indian Refiners Boost US Oil Imports Ahead of Trade Talks

Key Highlights

• Crude Prices Fall: Brent down 1.01% to $63.61; WTI down 1.17% to $59.72.
• INR Strengthens: Rupee trades at ₹85.09 vs USD, appreciating ₹0.08.
• US Oil Imports Surge: June imports to hit 11.2M barrels—the highest since Aug 2024.
• Trade Leverage: India aligns oil buying strategy with upcoming US trade negotiations.

Crude Slips on Weak Demand from Asia & US Trade Tensions

• The Indian Rupee opened slightly stronger against the US Dollar, currently trading at ₹85.09, marking an appreciation of ₹0.08. The currency opened at ₹85.17 today, slightly below yesterday’s close of ₹85.17. 
• Meanwhile, crude oil prices witnessed a decline, with Brent Crude falling by 1.01% to $63.61 per barrel, down from yesterday’s close of $64.25. Similarly, WTI Crude slipped 1.17%, currently at $59.72 per barrel, compared to $60.42 at the previous close.

Price Drivers:
1. Reduced refinery demand from Singapore.
2. Lower Chinese buying appetite.
3. Increased discounting of WTI to attract Asia-based refiners.

Market Demand and Supply

Rising Indian Demand for US Oil - Indian refiners are set to import approximately 11.2 million barrels of US crude in June, the highest since August 2024, as per Kpler Ltd.
Indian Oil Corp. (IOC) and Bharat Petroleum Corp. (BPCL) have already secured at least 6 million barrels for June. BPCL also acquired 1 million barrels of US crude for delivery spread across the next four months. IOC is purchasing 3 million barrels for July, indicating continued demand.

Private Sector Activity - Reliance Industries Ltd., a major private refiner, has yet to announce its procurement plans but is a known regular buyer of US crude.

Shift in Import Source - These purchases are displacing lighter oil imports from West Africa, signaling a shift in India’s sourcing strategy toward more competitively priced American barrels. 

Market News: Record US Crude Imports Mark Strategic Trade Pivot

• Crude oil prices are set to post their largest monthly drop in April as escalating US-led trade tensions cloud the global economic outlook. The ongoing trade war has raised concerns about slowing economic growth and weakening energy demand, putting further pressure on the market despite ongoing efforts by OPEC+ to support prices.
• The surge in US crude purchases comes ahead of key India-US trade talks in May.
• Indian refiners appear to be using oil imports as a geopolitical lever—buying more US crude to build goodwill or negotiation strength to reduce reciprocal tariffs.
• The Indian trade deficit widened in March, with oil imports rising over 60% month-on-month, increasing pressure on trade policymakers.
• The move aligns with the temporary suspension of a proposed 26% tariff on Indian goods by the US, providing a window for negotiations.

Market Expectation: India Eyes Long-Term Energy Ties Ahead of May Trade Talks

The market expects India to sustain its appetite for US crude in the near term, especially if WTI maintains its price advantage. A potential India-US trade deal could further strengthen energy ties and possibly normalize or increase long-term crude flows from the US to India.