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India Shifts Oil Buys: Beyond Discounts to Geopolitics
20 Feb
Summary
- India is prioritizing resilience and US energy ties over opportunistic discounts.
- Russian oil imports fell over 40% in January 2026 due to sanctions.
- US and Venezuela re-emerge in India's crude mix as geopolitical risks shift.
India is implementing a new energy security doctrine that prioritizes compliance resilience, supply diversification, and stronger US energy linkages, marking a strategic shift from purely discount-driven crude oil imports. This recalibration is driven by the nation's high import dependence, estimated at 87%, with demand projected to rise significantly by 2035.
As of January 2026, imports from Russia have decreased by over 40% year-on-year, influenced by tightening sanctions dynamics. This has led to a resurgence of the United States and Venezuela in India's crude oil mix, offering tactical alternatives and potentially easing bilateral trade friction with Washington.
The country's evolving strategy balances price competitiveness with supply security, maintaining sourcing flexibility. This recalibration, partly influenced by US tariff threats and a recent trade agreement, reinforces the effectiveness of US trade policies and may foster deeper cooperation in areas like liquefied natural gas and clean technology supply chains.
