Abandoning Russian oil is now India's intent
In response to mounting U.S. sanctions threats and tightening EU price caps on Russian crude, India is actively diversifying its oil supply sources to ensure energy resilience amid global uncertainties.
The sanctions, imposed in response to Russia's failure to reach a ceasefire with Kyiv within 50 days, have prompted concerns about potential disruptions to India's oil imports, which currently account for nearly 40% of the country's needs. However, India's Oil Minister, Hardip Singh Puri, has expressed confidence that the country can handle any issues related to imports from Russia and meet its oil needs through alternative sources.
India's oil supply diversification strategy in 2025 is a proactive, multi-pronged approach.
Firstly, the country is reducing its reliance on Russian oil and expanding its procurement from other countries. The share of oil imported from the Middle East has decreased from over 65% to about 55%, with growing imports from the U.S. (around 400,000 barrels per day, or bpd) and Brazil (250,000 bpd). New emerging suppliers in India’s portfolio include oil exporters from Guyana (620,000 bpd, driven by offshore ExxonMobil production), Brazil, and African nations like Nigeria and Angola, which are ramping up production after pandemic setbacks.
Secondly, India is significantly increasing its Strategic Petroleum Reserves (SPR) capacity to 13.32 million metric tons by 2025, which covers approximately 22 days of consumption. This expansion provides a buffer to manage supply shocks arising from geopolitical or sanction-related disruptions.
Thirdly, Indian refiners are set to expand capacity by 20% by 2028, enabling them to process a wider bouquet of crudes, including the higher-quality U.S. shale oil, which offers favorable refining margins. U.S. crude exports to India have surged to around 400,000 bpd, with Indian commitments to increase annual U.S. energy imports from $15 billion to $25 billion, notably including LNG, which enhances overall energy security beyond oil.
Lastly, India is leveraging public-private partnerships and international collaborations, such as with UAE’s ADNOC, to solidify oil supply chains and improve infrastructure, transforming itself into a regional energy hub.
In a statement to Reuters, Puri noted that there are many new suppliers in the market, such as Guyana, and available offers from existing producers, including Brazil and Canada. He also stated that India has diversified its supply sources, with the number of supplier countries for India increasing from around 27 to 40.
This strategy balances economic pragmatism with geopolitical caution, ensuring India’s energy resilience amid global uncertainties. Puri's confidence in managing any issues related to imports from Russia underscores India's commitment to maintaining stable and secure energy supplies for its growing economy.
The proactive oil supply diversification strategy implemented by India in 2025 involves reducing the country's reliance on Russian oil and expanding procurement from other countries, such as the United States and Brazil. Furthermore, India is significantly increasing its Strategic Petroleum Reserves (SPR) capacity to secure alternative supplies and manage supply shocks.
