India’s Oil Import Dependence Hits All-Time High

India’s dependence on crude oil imports is on track to set a record high in the fiscal year ending March 31, 2025, as Indian fuel demand continues to grow while domestic crude production remains flat.

India imported 88.2% of the crude it consumed in the April 2024-February 2025 period, according to oil ministry data reported by The Indian Express.

The import dependence has increased from 87.7% in the same period of the 2023/2024 fiscal year, the data showed.

The Indian import dependence in the full 2023/2024 fiscal year averaged 87.8%. As import and demand trends have shown in recent months, the 2024/2025 fiscal year will see an even higher – an all-time high – reliance on crude oil imports.

India last year surpassed China as the world’s largest oil demand driver, amid growing demand for fuel transportation in India and slowing gasoline and diesel demand in China due to the advance of electric vehicles and LNG-fueled trucks in the world’s top crude oil importer.

In the near term, Indian refiners are on the lookout for funding to build new refineries as they seek to expand their refining capacity to meet growing domestic demand for fuels amid higher-than-average economic growth and rising middle-class numbers.

India, however, remains vulnerable to oil price shocks as its need for imported crude continues to grow.

That’s why the country, which is the world’s third-biggest crude importer after China and the U.S., has turned to cheap Russian oil unwanted and sanctioned by the West.

Since the Russian invasion of Ukraine and the bans on Russian oil in the West, India has become a key buyer of Russian crude, alongside China. Russia, for its part, became the single biggest oil supplier to India.

Indian imports of crude oil from Russia appear to be rebounding in March following lower purchases earlier this year in the immediate aftermath of the January U.S. sanctions on Russia’s oil trade.

Traders have booked more non-sanctioned tankers to deliver crude to India, while the price of Russia’s flagship Urals grade has dropped to below the $60 per barrel price cap by the G7, allowing shipments involving Western companies, Reuters reported earlier this month, citing ship-tracking data and trading sources.

By Tsvetana Paraskova for Oilprice.com

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