India’s Oil Imports from US Hit New High: Will Energy Ties Deepen Amid Global Shifts?

India’s crude oil imports from the US increased to a multi-year high in April, indicating a potential deepening of energy ties. According to Business Standard, state-run oil companies in India have accelerated their efforts to procure liquefied natural gas (LNG) from the US.

These state-run oil companies are leading the charge on behalf of New Delhi by ramping up US energy purchases, especially as private refiners take a more cautious approach by focusing on cost and profit margins, industry officials told Business Standard.

Expressing her views on the implications of these developments, Gauri Jauhar, Executive Director (Energy Transition and Cleantech Consulting) at S&P Global Commodity Insights, told The Hindu that procuring more oil and gas from the US will help India diversify its long-term sources of supply.

India’s Needs on Oil and Gas

According to Ministry of Statistics and Programme Implementation (MoSPI), India imported 234.26 million tonnes of crude oil in 2023-24. The Hindu reported that the country’s import dependence rose slightly to 87.8% from 87.4% in the previous financial year.  Domestic crude oil production met less than 13% of India’s needs in 2023-24, with production nearly flat at 29.36 million tonnes last fiscal (2023-24).

While the overall oil imports remained steady, the import bill in 2023-24 declined year-on-year to $133.37 billion from $157.53 billion in 2022-23, due to declining international prices. During the same period, India also imported 48.69 million tonnes of petroleum products for $22.93 billion and exported 62.59 million tonnes of products for $47.72 billion, reported The Hindu.

In addition, India imported 31.80 billion cubic metres (bcm) of LNG for $13.405 billion in 2023-24, up from 26.30 bcm in the previous year. Despite the volume increase, The Hindu reported that the import bill reduced from $17.11 billion in 2022-23, due to lower prices following the price shock caused by Russia’s invasion of Ukraine.

Commenting on the importance of energy ties with the US, Petroleum Minister Hardeep Singh Puri told The Hindu that India aims to increase the share of natural gas in its energy mix from around 6% to 15%.