India, the world’s third-largest energy consumer, is increasingly becoming a focal point in the geopolitical rivalry between the United States and Russia. Both nations are vying for a larger portion of the country’s energy imports, according to a recent report from CNBC’s ‘Inside India’ newsletter.
India is the world’s third-largest importer of crude oil, the fourth-largest buyer of liquefied natural gas (LNG), and the second-largest importer of liquefied petroleum gas (LPG). This makes it a critical market for energy exporters.
While Russia seeks to maintain its dominant position in India’s crude imports, Washington is pushing New Delhi to replace Russian barrels with crude from Venezuela and the U.S. However, energy experts told CNBC that such a shift would be “challenging” for India, especially given constrained supply from the Middle East amid the ongoing Iran war.
India’s growing reliance on Russian and U.S. crude
Russia has cemented its status as India’s largest crude supplier, accounting for more than 50% of the country’s oil imports in June and July, and nearly 43% in August so far, according to data from market intelligence firm Kpler. Between April and July, Russian exports to India rose nearly 60% from the previous year, per India’s latest trade data.
Despite U.S. pressure, experts do not expect an immediate decline in India’s Russian crude purchases. “We do not expect Russian imports to ease currently,” said Sumit Ritolia, lead research analyst at Kpler, adding that “replacing Russian barrels is technically feasible, but economically and politically fraught.”
U.S. crude is relatively light, while many Indian refineries are configured to process medium and heavier grades. Venezuelan crude, which is heavier, fits better with India’s refining capabilities, Ritolia noted. India’s crude imports from Venezuela have risen from zero in March to 383,000 barrels per day so far in August, Kpler data shows.
The U.S. gains ground in LPG and LNG
The U.S. has emerged as India’s top supplier of LPG and LNG. In July, over 70% of India’s LPG imports and nearly a third of LNG supplies came from the U.S., according to Kpler. U.S. Ambassador to India Sergio Gor said at a New Delhi event that Washington’s LPG and LNG supplies to India had risen over 60% from the previous year.
The Iran war has disrupted the traditional dominance of Middle Eastern suppliers like Qatar, the UAE, and Saudi Arabia in India’s LPG market, according to Pankaj Srivastava, senior vice president of commodity markets-oil at Rystad Energy. The U.S. has filled the gap, supported by bilateral energy agreements and higher U.S. production.
Tariffs and trade pressure
The U.S. has used both tariff threats and trade deals to push India to curtail its Russian crude imports. In August last year, Washington imposed a 25% tariff on Indian imports as a penalty for buying Russian oil, but revoked it in February this year. President Donald Trump later said the U.S. had agreed to cut tariffs to 18% after India agreed to stop buying Russian oil and purchase more from the U.S. and Venezuela.
India has not endorsed Trump’s account and maintains that energy security drives its purchase decisions. The potential return of steep tariffs looms, as a Russia Sanctions bill proposing up to a 100% levy on countries buying Russian energy is set to move to the U.S. House for final approval in September.
When India faced 25% tariffs last year, its imports from Russia fell more than 13% in the financial year ending March 2026, while U.S. exports to India rose nearly 16%. In February this year, India’s Russian oil purchases dropped to their lowest level in over three years, at 1.06 million barrels per day, according to Kpler. During that period, imports from Iraq rose.
Russian President Vladimir Putin has acknowledged the trade fluctuations with India but noted that exports are rising again this year. While the U.S. and Russia compete for influence, India’s energy needs remain the primary factor guiding its import decisions.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/27/india-us-russia-energy-oil-market.html
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