India to Diversify Energy Supplies, Increase Oil and Gas Purchases from US

Strategic Insights -

India, the world's third-largest oil consumer, is seeking to reduce its dependence on Russian oil and diversify its energy supplies. To achieve this goal, the country is looking to step up purchases of crude oil and natural gas from the US. This move comes as Indian Prime Minister Narendra Modi faces pressure from US President Donald Trump over India's imports of discounted Russian oil. Trump has announced a 50% tariff on imports from India in August, citing India's purchases from Moscow. In response, India's Trade Secretary Rajesh Agarwal stated that the country is willing to increase its purchases of American oil and natural gas if prices are competitive. Agarwal noted that India has been buying around $12-$13 billion worth of crude oil and gas from the US annually, and there is room to nearly double that without causing disruptions for Indian refiners.

Key Takeaways:

  • India is looking to diversify its energy supplies and reduce its dependence on Russian oil, with a focus on increasing purchases of crude oil and natural gas from the US.
  • US President Donald Trump has announced a 50% tariff on imports from India in August, citing India's purchases from Moscow.
  • India's Prime Minister Narendra Modi has engaged positively with Trump's social media posts, suggesting that New Delhi is keen to expand cooperation with the US.
  • India has been buying around $12-$13 billion worth of crude oil and gas from the US annually, and there is room to nearly double that without causing disruptions for Indian refiners.
  • The US is interested in deepening energy cooperation with India, with talks on that underway.
  • India's energy policy includes broad basing energy sourcing and diversifying as appropriate to meet market conditions.
  • The Indian government is currently discussing a bilateral trade agreement with the US, which includes energy cooperation.
  • A team of Indian government officials will visit the US to discuss the agreement, which sets a target of finalizing the first tranche of the agreement by autumn.

Statistics:

  • India has been buying around $12-$13 billion worth of crude oil and gas from the US annually.
  • The US has announced a 50% tariff on imports from India in August.
  • India is looking to increase its purchases of American oil and natural gas if prices are competitive.
  • The Indian government is willing to nearly double its annual purchases of crude oil and gas from the US without causing disruptions for Indian refiners.
  • The US and India have been discussing a bilateral trade agreement that includes energy cooperation, with talks underway.
  • India's energy policy includes broad basing energy sourcing and diversifying as appropriate to meet market conditions.

Sources:

  • Global Data Point. (2022). India says it is looking to step up purchases of crude oil and natural gas from the U.S.
  • Indian Ministry of External Affairs. (2022). Statement by the Ministry of External Affairs on the US-India Bilateral Trade Agreement.