The United States and Russia are intensifying competition for a larger share of India’s energy market, as the world’s third-largest energy consumer becomes increasingly important to both countries amid shifting global oil and gas supplies.
India is the world’s third-largest crude oil importer, fourth-largest LNG buyer and second-largest LPG importer, making it a key market for major energy producers and exporters.
Russia remains India’s largest crude supplier, while the United States has strengthened its position in India’s LPG and LNG markets and is seeking to expand its share of the country’s crude imports.
Moscow wants New Delhi to maintain its purchases of Russian crude despite growing pressure from Washington, while the US has encouraged India to replace Russian barrels with oil from Venezuela.
Experts, however, say replacing Russian crude at a time when supplies from the Middle East are constrained would be challenging for India, even as the country increases its purchases of Venezuelan oil.
“If U.S. and Venezuelan crude are combined, the Americas are becoming more important to India’s crude basket,” Sumit Ritolia, lead research analyst at market intelligence firm Kpler, told CNBC.
Ritolia said Indian refiners could not simply replace Russian or Middle Eastern crude with US supplies because US crude is relatively light, while several Indian refineries are configured to process medium and heavier grades.
He said heavier Venezuelan crude helps address that challenge.
Kpler data showed that India’s Venezuelan crude imports increased from zero in March to 383,000 barrels per day in August so far. Combined with US crude imports, the two sources accounted for about 11% of India’s crude imports during the period.
Russia continues to hold a dominant position in India’s crude market.
Russian President Vladimir Putin said on Monday that “Russia is expanding its exports to India and is ready to continue doing so,” signalling Moscow’s intention to maintain its growing energy relationship with New Delhi.
Kpler data showed that Russian crude accounted for more than 50% of India’s oil imports in June and July, and nearly 43% in August so far.
India’s latest trade data also showed that Russian exports to the country rose by nearly 60% between April and July compared with the same period last year.
However, Russia’s dominance in crude has been accompanied by a growing US presence in other segments of India’s energy market.
The US has become India’s largest supplier of LPG, which is widely used as a cooking fuel, as well as LNG, which serves industrial needs.
Kpler data showed that more than 70% of India’s LPG imports and nearly one-third of its LNG supplies came from the US in July.
US Ambassador to India Sergio Gor said at an event in New Delhi on Saturday that American energy supplies to India had been “unmatched”, adding that US LPG and LNG supplies had increased by more than 60% from a year earlier.
The shift has partly been driven by disruptions to traditional Middle Eastern supply routes.
“The Middle East — particularly Qatar, the UAE and Saudi Arabia — traditionally dominated India’s LPG imports due to its logistical advantage,” said Pankaj Srivastava, senior vice president of commodity markets-oil at Rystad Energy.
“The Iran war has scuttled that advantage.”
According to Srivastava, the US has emerged as a leading supplier since the conflict began, supported by bilateral energy agreements, higher US production and constraints on Middle Eastern supply.
The US is also seeking a larger share of India’s crude market through a combination of tariff threats and trade incentives.
Washington imposed a 25% tariff on Indian imports in August last year as a penalty for India’s purchases of Russian oil, before revoking the measure in February this year.
US President Donald Trump later said Washington had agreed to reduce tariffs on India to 18% after New Delhi had “agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela.”
India, however, has not endorsed the details outlined by Trump and has maintained that energy security remains the primary consideration guiding its oil purchases.
The pressure could intensify again, with a Russia sanctions bill proposing tariffs of up to 100% on countries purchasing Russian energy supplies expected to move to the US House of Representatives for final approval in September.
The previous 25% tariffs coincided with a decline in India’s imports from Russia. Government data showed that imports from Moscow fell by more than 13% in the financial year ending March 2026, while US exports to India increased by nearly 16%.
During a meeting with India’s Foreign Minister S. Jaishankar earlier this week, Putin acknowledged a decline in bilateral trade last year but said trade “this year it has been steadily rising.”
India’s purchases of Russian crude also declined gradually after the US tariffs took effect last August, reaching 1.06 million barrels per day in February, the lowest level in more than three years, according to Kpler data.
Despite the possibility of tougher US sanctions, analysts do not expect India to immediately reduce its Russian oil purchases because global crude supplies remain constrained.
“We do not expect Russian imports to ease currently,” Ritolia said, adding that “replacing Russian barrels is technically feasible, but economically and politically fraught.”
The intensifying US-Russia competition underscores India’s growing importance in the global energy market, with New Delhi balancing energy security, refining requirements, trade relations and geopolitical pressures as it diversifies its sources of crude, LNG and LPG.
Boluwatife Enome
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