Oil & Gas

India remains steadfast in its energy policy, prioritizing the procurement of oil and gas at the lowest possible prices, with a particular emphasis on cheaper Russian crude. Indian Oil Minister Hardeep Singh Puri reaffirmed this stance at the Gastech conference in Houston, stating that as long as suppliers are not under sanctions, India will continue to source from the most affordable options available. This approach is crucial for a country that imports over 85% of its petroleum to support its growing economy and expanding refinery infrastructure.

In recent years, India has significantly increased its purchases of Russian oil, benefiting from discounted prices amid international sanctions and embargoes on Russian exports to Western nations. This trend has made Russia India's largest oil supplier, reflecting the shift in global trade dynamics. In July, India surpassed China to become the top buyer of Russian crude, as Chinese refiners reduced their imports due to declining refining margins and weaker fuel demand.

The data indicates that a remarkable 44% of India’s total oil imports in July came from Russia, with volumes hitting a record 2.07 million barrels per day—an increase from previous months and the same period last year. This surge in imports underscores India's growing reliance on Russian oil, particularly in the context of fluctuating global energy markets.

Looking ahead, India is exploring long-term supply agreements with Russia to secure stable and predictable oil supplies, a necessity for its planned expansion of refining capacity. Indian state-owned refiners are reportedly in discussions for potential long-term contracts, as the country aims to increase its crude processing capacity to 6.19 million barrels per day by 2028, thereby enhancing its energy security and supporting its economic growth ambitions.