Cheap oil, high stakes: Can India do without Russia?

Cheap oil, high stakes: Can India do without Russia?

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**India’s Delicate Balancing Act: Navigating Russian Oil Imports Amid US Pressure**

In recent months, India has found itself at the center of geopolitical crossfire over its energy policy, particularly its continued imports of Russian oil. This issue, which intertwines economics, diplomacy, and national interests, has amplified tensions between India’s traditional allies and newer partners, especially as the global landscape shifts following the war in Ukraine and the imposition of Western sanctions on Russia.

### The Escalation of Tensions

The current situation escalated in August when the United States imposed a steep 50% tariff on Indian goods. Officially, this move was framed as a punitive measure against India for its continued purchases of Russian oil, despite rising Western pressure to isolate Moscow economically. The tariffs were widely seen as part of a broader campaign to discourage India from supporting Russia economically, even indirectly.

The situation took another turn when former US President Donald Trump claimed in a public statement that Indian Prime Minister Narendra Modi had privately assured him that India would soon stop buying Russian oil. This assertion, made without corroboration, thrust the issue further into the international spotlight and prompted swift responses from both Russia and India.

### Official Reactions: Russia and India Respond

Russia’s response to Trump’s claim was measured but firm. Denis Alipov, Russia’s envoy to Delhi, emphasized the essential role Russian oil plays in the Indian economy. He described Russian oil as "very beneficial for the Indian economy and for the welfare of Indian people," signaling that Moscow views its energy exports to India as mutually advantageous and a key component of its relationship with New Delhi.

India, meanwhile, distanced itself from Trump’s remarks. The Indian government reiterated that its energy import policy is "guided by the interests of the Indian consumer in a volatile energy scenario." Essentially, New Delhi made it clear that decisions about oil imports are based on national priorities, not on external pressure. A government spokesperson further added that he was unaware of "any conversation yesterday" between Modi and Trump, suggesting that the alleged assurance never took place or was being misrepresented.

### The Importance of Russian Oil for India

India’s predicament stems from its reliance on imported energy. As the world’s third-largest oil importer, India’s economic stability and growth are deeply tied to securing affordable energy sources. In the past year alone, India imported $52.7 billion worth of Russian crude, which accounted for about 37% of its total oil bill. Other major suppliers during this period included Iraq, Saudi Arabia, the United Arab Emirates (UAE), Nigeria, and the United States.

This heavy reliance on Russian oil did not happen overnight. Historically, India’s oil imports have been diversified. In the financial year 2021-22, before the sharp rise in Russian imports, India sourced crude oil from a mix of countries: Russia, Iraq, Saudi Arabia, UAE, US, Brazil, Kuwait, Mexico, Nigeria, and Oman were the top ten suppliers, supplemented by smaller deals with 31 other countries.

A common misconception is that India depends almost exclusively on Russian oil. In reality, India also imports significant volumes of petroleum products from the US. In 2024, for example, India purchased $7.7 billion worth of petroleum products from the US, including $4.8 billion in crude oil. Despite these imports, India still ran a $3.2 billion petroleum trade deficit with Washington, according to the Global Trade Research Initiative (GTRI), a Delhi-based think tank.

### How India’s Oil Import Patterns Have Shifted

India’s oil basket has undergone two major transitions in recent years. The first shift occurred between 2018-19 and 2021-22, when imports from Iran and Venezuela—once accounting for 17% of India’s total oil imports—were phased out. This was due to international sanctions on both countries, which made it difficult for India to continue doing business with them. Their absence was compensated by increased imports from traditional suppliers in the Gulf, such as Iraq, Saudi Arabia, and the UAE.

The second, and more dramatic, transition followed the outbreak of the Ukraine war. With the imposition of Western sanctions on Russia, Moscow began offering its crude oil at steep discounts to attract non-Western buyers. For Indian refiners, these discounts were too

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