Can India Afford to Buy More US Oil?

India’s fuel prices have been rising steadily due to high global crude oil prices, a weakening rupee against the dollar, and elevated taxes on petrol and diesel. Dependence on imported crude, which constitutes over 85% of India’s needs, makes the country highly vulnerable to international price swings and supply disruptions. The recent visit by US Secretary of State Marco Rubio has highlighted America’s push for India to buy large volumes of US crude as part of a broader $500 billion energy trade commitment. However, importing US light shale oil may further increase fuel prices. Indian refineries are optimised for heavy crude, leading to lower efficiency when processing lighter American oil. Additionally, longer shipping distances from the US Gulf Coast result in significantly higher freight and insurance costs compared to Russian or Middle Eastern supplies. Without the discounts Russia often provides and with payments required in dollars, the landed cost of US crude is likely to be higher, eventually pushing petrol and diesel prices upward at Indian pumps.