India Becomes 7th Largest Buyer Of US Oil - Is It Diversification Or Strategic Rewiring?

Amid the ongoing Middle East crisis, which has triggered spike in oil prices and disruptions, India has emerged as the seventh largest purchaser of US oil.

"India now ranks as the 7th-largest buyer of US oil. This is less about scale alone, and more about a quiet, strategic rewiring of its import dependencies,' according to brokerage house Motilal Oswal.

Currently, India imports 221 million barrels of crude oil from the United States. India energy sourcing remains centered around national interest and has been diversified across 40 nations instead of 27 a decade back.

Strait of Hormuz is crucial to nearly 40% of India's crude imports, however, incremental supplies could be sourced from alternative markets, including Russian Urals, US crude and other global producers, even if discounts narrow.

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In January, India imported 23% of its crude oil from Russia, tallying to 1.16 million barrels per day. This comes before the recent 30-day waiver from the US Treasury permitting continued purchases of Russian oil to stabilise global markets.

Iraq 21% or 1.03 million barrels per day, Saudi Arabia 16% or 0.79 million barrels per day. It also relied on 0.40 million barrels per day or 8% on the UAE, and 0.30 million barrels per day from the US. 

Additionally, India maintains strategic petroleum reserves that could be deployed if necessary to cushion short-term disruptions, though current conditions suggest such measures may not be required unless supply constraints intensify materially.

Meanwhile, 'Jag Laadki', carrying 80,800 metric tonnes of crude oil is slated to arrive at Mundra Port, in Kutch, Gujarat on March 18, 2026. 

Currently, India imports about 88 per cent of its crude oil, 50 per cent of natural gas and 60 per cent of LPG needs.