Preliminary data from the Ministry of Petroleum and Natural Gas, corroborated by independent trade analytics firm Kpler, showed India imported more than 5.14 million barrels per day (bpd) of crude oil in May 2024. This volume is the highest recorded since May 2022 and represents a 7% month-on-month increase as well as a 9% rise year-on-year.
The surge comes against the backdrop of robust economic growth forecasts and seasonal spikes in demand for gasoline and diesel ahead of the busy summer and monsoon travel periods. “India’s appetite for crude has consistently outpaced supply as the economy rebounds post-pandemic,” noted energy analyst Ravi Yadav of S&P Global Commodity Insights.
Russian Oil Remains a Key Supplier
Russia retained its position as India’s top oil supplier, providing 1.98 million bpd—approximately 39% of total imports. Despite Western sanctions targeting Russia’s energy sector due to the ongoing war in Ukraine, India has continued to leverage discounted pricing offers, resulting in increased Russian crude purchases.
According to traders cited by Reuters, Russian Urals crude remains up to $7 per barrel cheaper than Brent, the international pricing benchmark. “Russian oil enables Indian refiners to keep pump prices stable, a critical policy goal in an election year,” said Meera Chaudhary, an economist at the Observer Research Foundation.
Middle East: Saudi and Iraqi Supplies Rise
Imports from the Middle East also expanded, with Iraq supplying 1.16 million bpd (an 11% jump from April), and Saudi Arabia sending over 910,000 bpd (a 6% rise). Refiners cited reliability and stable pricing as leading factors for the uptick, especially as OPEC+ maintained April’s production targets.
Rising Demand Drives Import Growth
India’s domestic demand for petroleum products grew by nearly 5% in May, according to the Petroleum Planning & Analysis Cell (PPAC). Higher consumption of gasoline, diesel, and jet fuel has been fueled by accelerating industrial activity, increased automobile sales, and bumper tourism numbers.
Strategic Stockpiling in Uncertain Times
Analysts suggest that part of the import surge also reflects India’s efforts to build strategic reserves amid uncertain geopolitics and price volatility. The global oil market has faced disruptions from the ongoing Middle East conflict, Red Sea shipping constraints, and the West’s standoff with Russia.
“India is taking advantage of opportune buying windows to bolster reserves and secure supply chains,” explained Vandana Hari, founder of Vanda Insights.
Environmental, Economic, and Geopolitical Impacts
While the import milestone underscores energy security, it also renews debate over India’s environmental pledges. Fossil fuel imports continue to account for the bulk of the country’s energy mix, presenting challenges as India eyes ambitious renewable energy targets for 2030.
At the same time, the high-volume purchases highlight India’s diplomatic balancing act—maintaining relationships with both Western nations and sanctioned suppliers like Russia. The US and EU have urged India to diversify energy sources and abide by global sanctions, but New Delhi has prioritized affordability and accessibility for its billion-plus population.
Looking Ahead: Market Projections and Policy Directions
Most analysts predict India’s elevated import levels will persist through Q3 2024 as industrial demand stays robust and monsoon-driven agricultural activity increases fuel consumption.
However, longer-term growth could face headwinds if crude prices spike further or international sanctions tighten. The government continues to signal openness to broader supply deals, including with US shale producers and African exporters, to hedge against future risks.
“India’s refining sector is agile, and our procurement policy remains market-driven,” Sunil Kumar, Director-General of the Ministry of Petroleum, said in a recent statement. “We will continue to source crude in a way that best serves our economic and energy security interests.”
