India to Increase Russian Oil Imports Despite Increased US Tariffs
Despite escalating tariffs imposed by the United States,India is projected to increase its imports of Russian crude oil by 10-20% in September,according to a recent report by Reuters.This decision follows the US doubling tariffs on Indian exports to 50%, a move linked to Washington’s concerns over India’s continued reliance on Russian oil.
The anticipated increase equates to an additional 150,000 to 300,000 barrels per day. The US initially implemented a 25% tariff on Indian exports in early August, subsequently raising it to 50%. while the US seeks a reduction in Indian imports of Russian oil, the Indian government is pursuing diplomatic avenues to avoid considerable cuts to its oil supply.
India has emerged as a key purchaser of Russian crude oil since the imposition of Western sanctions following the 2022 invasion of Ukraine.This has allowed Indian refineries to secure oil at lower costs. As of mid-2024, India was importing approximately 1.5 to 1.6 million barrels of Russian oil daily, fulfilling nearly 40% of its total crude oil needs. Increased Russian oil availability for export in September, due to refinery maintenance impacting domestic fuel production, further supports continued imports.
Analysts suggest a meaningful reduction in Indian imports is unlikely without a global ban, citing the attractive pricing of Russian oil even amidst market volatility. india is currently engaged in discussions with the US to resolve the tariff dispute, with Prime Minister Narendra Modi also pursuing diplomatic solutions, including meetings with russian President Vladimir Putin. the US has asserted that India is benefiting from discounted Russian crude, while Indian authorities point to continued purchases of Russian goods by Western nations.
A substantial decrease in India’s Russian oil imports could reduce global oil supply by almost one million barrels per day, potentially driving prices up to nearly $100 per barrel (approximately €85.3). Such a reduction would also negatively impact Russia, as India has become a vital market for maintaining Russian export volumes and revenue. Over the past two years, India’s preference for cheaper Russian crude has come at the expense of more expensive oil from OPEC, although OPEC’s share of Indian imports saw a slight increase in 2024 after an eight-year decline.
