India is the world’s hottest oil market right now, as China’s demand growth subsides from post-pandemic highs and India’s economy races ahead. Still overwhelmingly dependent on hydrocarbons like the rest of the world, India is set to reap some significant benefits in the energy area from a Trump presidency.
The basis for such forecasts, the latest coming from Gateway House, is, of course, Trump’s stated energy policy of “Drill, baby, drill”. According to Amit Bhandari and Aditya Shinde, this approach to the energy industry could open certain doors to India and enhance its supply security in crude oil.
The researchers note that according to OPEC’s projections of oil demand, the global total is set to reach 120 million barrels daily by 2050, up from 102 million barrels daily in 2023, with India alone experiencing oil demand growth of as much as 8 million barrels daily over that period. The amount is equal to 45% of total global growth, as forecast by the producer group. India cannot produce this oil locally. It also cannot afford wild swings in international oil prices when imports cover as much as 85% of its consumption.
On the supply side, India has been quite diversified. Following the Western barrage of sanctions against Russia in retaliation for its incursion into eastern Ukraine in 2022, global oil prices soared. India—and China—turned to Russia because its crude was selling at a discount due to the sanctions. In a matter of months, India became the biggest buyer of Russian crude oil, some of which it then exported on in refined form to the European Union, which had a stated ambition to cut all energy ties with Russia.
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In the first six months of India’s fiscal year to March 2025, the subcontinent’s imports of Russian crude oil went up by 9.1% to 1.91 million bpd. Russia continued to be India’s top oil supplier, ahead of Iraq and Saudi Arabia. Its lead over Iraq was more than double in September, as India imported about 867,600 bpd of crude from Iraq versus the close to 2 million bpd in Russian oil imports.
Not only that, but a senior Indian government official stated earlier this year that the country will not change its energy policy to buy oil and gas at the lowest possible price and will continue to purchase cheaper Russian crude supply.
“If an entity is not under sanctions, there is no question I will buy from the cheapest supplier,” Indian Oil Minister Hardeep Singh Puri told Reuters in September.
India has also been importing oil from Venezuela, although more sporadically due to the specifics of U.S. sanctions on Venezuelan crude, and it this year sealed an oil supply deal with Guyana.
“The proposed MoU covers the complete value chain of hydrocarbon sector including sourcing of crude oil from Guyana, participation of Indian companies in Exploration and Production (E&P) sector of Guyana,” among others, the Indian government said in a statement after the signing of the preliminary deal. The agreement will be for an initial period of five years and will be renewed automatically if the two countries don’t object to its renewal.
This kind of deal is exactly how Gateway House’s Bhandari and Shinde see India’s energy policy overseas during the Trump presidency. They argue that the way to secure more supply long-term is by investing in it, through stake acquisitions in public energy companies, for example, but also acquisitions in smaller oil companies, notably in the U.S., which it “has by the thousands.”
This would be doubly beneficial for Indian energy companies, the two researchers also noted, because U.S. companies are much safer than Russian ones in terms of sanctions. The remark is timely as India’s Reliance Industries recently struck a massive deal with Russia’s Rosneft, but if the Trump administration decides to carry on with the sanction attitude of the outgoing Biden administration, the deal could suffer.
The deal, for half a million barrels daily of Rosneft crude oil, is worth an estimated $13 billion annually at current prices. Its term is ten years. But if Washington under Trump steps up sanctions further, the deal may well be affected, as Rosneft is a prime target for Western sanction action due to its size and share in Russia’s total oil output.
Diversification, then, remains key for India in securing crude oil supply for the long term. That diversification could well include a stake in Aramco, Bhandari and Shinde wrote, noting the added benefit of sizable dividends that Western oil majors—and the Saudi state major—tend to distribute among their investors. Some of that money, the researchers argue, could be used to set up a fund similar to oil producers’ sovereign wealth fund for times when oil prices are no longer as affordable as they are now.
By Charles Kennedy for Oilprice.com