India Increases US Crude Oil Imports to Reduce Trade Tension

India has strategically reduced trade tensions with the Donald Trump administration by boosting its crude oil imports from the US. Kpler data shows that as of October 27, crude imports hit 540,000 barrels per day, the highest since 2022.

Ongoing trade concerns with the Trump administration are reflected in the recent crude oil import, which shows a strategic effort to diversify oil sources beyond Russia while managing recent trade tensions, according to the PTI report.

The question is: why is India suddenly increasing its imports of US crude oil? According to Sumit Ritolia, Lead Research Analyst for Refining, Supply & Modelling at Kpler, the reason is a favourable arbitrage opportunity. An expanded Brent-WTI differential and reduced Chinese purchasing have made WTI Midland an attractive option for Indian refineries.

According to US export data, exports have been substantial so far, with October expected to close around 575,000 bpd (Barrels Per Day). November’s projections range between 400,000 and 450,000 bpd, indicating a notable rise from the year-to-date average of about 300,000 bpd 

According to government and trade officials cited in the report, Indian refiners have increased their purchase of US crude types, such as Midland WTI and Mars, to diversify their supply sources and show cooperation with Washington. This strategic move coincides with Indian refineries managing tighter sanctions against Russian oil firms Rosneft and Lukoil.

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The PTI report indicates that India’s rising oil imports from the US are part of efforts to mitigate trade tensions following the Donald Trump administration’s imposition of a 50% tariff on Indian exports. This change reflects India’s strategic balance of ensuring energy security, managing its reserves, and responding to US concerns about Russian oil purchases.