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Historically, vigor information for the world’s third-largest lipid user India has been astir navigating the prevailing geopolitics whilst ensuring a affirmative economics for acquisition of crude lipid purchases.
From Saudi Arabia accounting for two-thirds of our lipid imports, to Russia emerging arsenic the large supplier, New Delhi’s crude lipid handbasket has seen aggregate argumentation shifts implicit the years.
Sourcing from West Asia
Ranjeet Mehta, CEO & Secretary General astatine the manufacture assemblage PHDCCI, and an perceiver of India’s vigor sector, notes that earlier 2005, India has traditionally depended connected West Asia for its crude requirements. Over 70% of the crude lipid came from Saudi Arabia, Iraq, Iran, Kuwait and UAE.
“Our crude lipid supplies saw a gradual broadening from 2005 to 2015 and included supplies from Nigeria and Angola successful Africa and Venezuela successful South America,” helium observed.
Despite this gradual broadening, much than 60% of the crude lipid imported successful 2011-12 came from 7 West Asian nations: Saudi Arabia (About 17% of the wide basket), Iran (11.3%), Iraq (10.5%), Kuwait (7%), United Arab Emirates (9%), Oman (3.4%) and Qatar (3.3%).
Oil from the African continent, chiefly from Nigeria and Angola, stood astatine a distant second, unneurotic accounting for astir 20% of the lipid that India imported during the period.
Tehran situation
The imminent situation to the existing operation backmost past had its epicentre successful Tehran.
In June 2010, The U.N. Security Council sanctioned Iran to halt them from acquiring weapons. This was successful absorption to Iran’s overt moves seeking to standard up its atomic programme. Later, successful 2011, the United States besides sanctioned the Central Bank of Iran and sought to authorisation immoderate different country’s slope if they procured Iranian oil.
In May 2011, past Minister of State for Petroleum and Natural Gas R.P.N. Singh, albeit not mentioning the planetary pressure, informed Parliament that India had chopped down connected its Iranian purchases.
Subsequently, its stock successful India’s crude handbasket dropped to 7.1% successful fiscal twelvemonth 2012-13, 5.8% successful 2013-14, 5.7% 2014-15 and 6.2% successful 2015-16.
Iranian conundrum continues
Sanctions connected Iran were lifted successful 2016 aft it was seen to person met their commitments nether the U.N. Security Council’s approved atomic agreement. As a result, India upped its crude lipid imports from Iran to 12.7% successful 2016-17. This was lone until U.S. President Donald Trump debuted astatine the Oval Office to enforce a caller acceptable of sanctions successful 2017.
In the consequent years — 2017-18 and 2018-19 — Tehran’s stock successful India’s lipid imports fell to a small much than 10%. New Delhi, having diversified its sources, procuring much from the United Arab Emirates and progressively from the U.S., slashed its Iranian purchases by 91.8% successful 2019-20.
At present, Mr. Mehta notes, astir 8-10% of our lipid comes from the African region, 10-12% from the Americas, with the Middle East accounting for 40-45% of our lipid imports.
Russian lipid enters handbasket
The adjacent large alteration successful India’s handbasket happened successful 2022.
Moscow’s actions successful Ukraine, starting February 2022, mired them successful aggregate sanctions from the European Union and the U.S. China and India, among the biggest lipid consumers globally, however, continued to acquisition Russian oil, which was present disposable astatine a discount.
India’s Directorate General of Commercial Intelligence and Statistics (DGCIS) noted successful their caller investigation that Russia became the top contributor successful India’s handbasket starting FY2022-23. Alongside the prevailing discounts, Indian refineries were “well-suited” to process arrivals from Moscow.
While Russia accounted for little than 2% of India’s crude lipid imports successful 2021-22, this jumped to 21.6% successful 2022-23. Thereafter, Russia’s stock further went up to 35.9% successful 2023-24 and 35.8% successful 2024-25. Meanwhile, the terms of Russian Urals declined from $79.41 for each tube successful April 2022 to $66.49 per tube successful March this year.
The shares of Iraq, Saudi Arabia, and the UAE declined lone marginally during this period, according to DGCIS data.
At present, lipid from Moscow accounts for one-third of the wide crude import basket.
India’s Russian purchases person a sustainable economics to it arsenic well. Maritime information and analytics supplier Kpler mentioned successful an October 2025 blog station that curtailing Russian imports would beryllium “difficult, costly and risky”.
“Substitution would necessitate accelerated scaling from aggregate suppliers, astatine higher costs (freight, weaker discounts). If margins compress oregon retail prices rise, the effect could beryllium inflation, governmental backlash, and weaker refinery profitability,” it stated, adding, “Higher-cost crude could besides worsen home operating budgets and enactment unit connected refiner recognition lines.”
