India’s reliance on crude oil imports is set to reach a new record in the fiscal year ending March 31, 2025, as domestic fuel demand continues to rise while crude production remains stable.
According to data from India’s Ministry of Petroleum and Natural Gas, crude oil imports accounted for 88.2% of total consumption between April 2024 and February 2025. This marks an increase from 87.7% during the same period in the 2023/24 fiscal year. The overall import dependence in 2023/24 averaged 87.8%, indicating a continued upward trend.
India recently became the world’s largest driver of oil demand, surpassing China, amid increased fuel consumption in the transportation sector. Meanwhile, China has seen a slowdown in gasoline and diesel demand due to the expansion of electric vehicles and LNG-powered trucks.
To address growing fuel requirements, Indian refiners are seeking investments to expand refinery capacity. However, the country remains susceptible to fluctuations in global oil prices due to its high reliance on imports.
In response to these challenges, India has increased purchases of discounted Russian crude oil. Following Western sanctions on Russian oil exports, India and China have emerged as major buyers. Russian crude has become a significant component of India’s oil imports, with shipments rebounding in March 2025 after a temporary decline earlier in the year due to U.S. sanctions on Russia’s oil trade.
Recent reports indicate that traders have booked additional non-sanctioned tankers to facilitate deliveries to India, while the price of Russia’s Urals crude has dropped below the $60 per barrel cap set by the G7, allowing transactions involving Western companies.
India remains the world’s third-largest crude oil importer, following China and the United States. As domestic demand continues to grow, its import dependence is expected to remain a key factor in the country’s energy strategy.
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