The US and Russia compete for a share of India’s energy market
The United States and the Russian Federation — an aggressor state — are seeking to expand their presence in India’s energy market, the world’s third-largest energy consumer. Moscow is trying to maintain oil supplies to the country, while Washington is urging New Delhi to replace Russian oil with crude from the United States and Venezuela, CNBC reports.
India ranks third in the world for crude oil imports, fourth for purchases of liquefied natural gas (LNG), and second for imports of liquefied petroleum gas (LPG). According to Kpler, Russia was India’s largest oil supplier: its share exceeded 50% of Indian oil imports in June and July and stood at nearly 43% in August as of publication.
Venezuelan oil gains importance
Imports of Venezuelan oil to India rose from zero in March to 383,000 barrels per day in August as of publication. Together with US oil, supplies from the United States and Venezuela accounted for about 11% of India’s crude oil imports during this period.
Kpler’s lead analyst Sumit Ritolia said that US and Venezuelan oil are strengthening the role of the Americas in India’s procurement structure. At the same time, he stressed that Indian refineries cannot fully replace Russian or Middle Eastern oil with US oil, as the latter is relatively light and some plants are designed to process medium and heavier grades. Venezuelan oil, he said, is better suited to these technological requirements.
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Gas supplies and tariff pressure
The United States became India’s largest supplier of LPG and LNG. In July, the US accounted for more than 70% of India’s LPG imports and nearly one-third of LNG supplies, according to Kpler data. Rystad Energy Senior Vice President Pankaj Srivastava said that the war in Iran had constrained supplies from the Middle East, which traditionally dominated India’s LPG imports.
US President Donald Trump said that Washington had agreed to reduce tariffs for India to 18% after its alleged agreement to stop buying Russian oil and purchase more energy resources from the US and possibly Venezuela. India has not confirmed these details and says it is guided by energy security needs.
In September, a bill on sanctions against Russia, which provides for tariffs of up to 100% on countries buying Russian energy resources, is due to reach the US House of Representatives for final approval. Experts interviewed by CNBC believe the initiative is unlikely to cause an immediate reduction in India’s purchases of Russian oil due to limited supply on the global market.
