India’s US Oil Buys Hit Record Highs As Trade Talks Set to Begin Next Month

As a follow-up to the virtual talks between India and US officials, which started this month, the officials are scheduled to start face-to-face negotiations on the proposed bilateral trade agreement (BTA ) next month. Bloomberg reported that before the talk starts, Indian refiners have been purchasing huge amount of oil from the US.

The report said that the US will import nearly 11.2mn barrels of crude to India in June. The provisional data from analytics firm Kpler reveals that this is the highest volume since last August. Notably, it comes after a drop in prices in the West Texas Intermediate benchmark as a result of lower demand due to a refinery overhaul in Singapore and reduced appetite in the world’s biggest oil importer China.

A sharp rise in oil and gold imports has pushed India's merchandise trade deficit to over $21bn in March. The deficit rose after registering a three-year low trade deficit of $14.05bn in the previous month. Oil imports jumped over 60% in March as compared to February.

According to the report, state refiners including Indian Oil Corp. and Bharat Petroleum Corp. have bought at least 6mn barrels of June-arrival crude from the US across various tenders held this month. Likewise, Bharat Petroleum also purchased 1mn barrels for the four months through September. It is also seeking spot supplies including grades from the US. Furthermore, Indian Oil has also started buying crude for July, including 3mn barrels from the US. The report said that even though Reliance Industries also a regular buyer of US crude but it isn’t yet clear how much they have procured for the coming months.

India's Need for Oil

India is the world's third-largest oil importer and consumer. Its domestic production accounts for less than 13% of the requirement. India imported a total of 234.26mn tonnes of crude oil in 2023-24 with import dependence reaching 87.8% against 87.4% in the previous financial year.