India’s energy import strategy depends on discounts on offer, says Oil Minister Hardeep Puri

Oil Minister Hardeep Puri hinted that energy imports from the US are likely to witness an uptick, but the final commercial arrangements would depend on further discussions.

India already buys crude oil worth $20 billion from America, and further increase in the offtake would depend on commercial arrangements, Oil Minister Hardeep Puri told Moneycontrol during an interaction on February 13. This comes as India’s crude import relations look set to evolve, after US' pledge to pump more oil and gas, and Russia diverting its crude supplies towards Asia.

India’s energy import strategy is dependent on discounts offered by the suppliers, Minister of Petroleum and Natural Gas Hardeep Singh Puri said, adding that the country is looking to buy the cheapest oil available in the market.

“Our entire oil/energy import policy is based on discounts. If I am getting cheaper crude (from a country), why would I buy from an expensive source. They would compete among themselves. We will float the tender and buy from the cheapest source,” said Puri.

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After US and China, India is the third-largest consumer of crude oil in the world, with an import dependency of over 85 percent for the current fiscal. India consumes around 5 million barrels of crude oil per day, while that of US and China stands at around 20 million bpd and 12 million bpd, respectively.

Given this high import quotient, and the shift in the energy market with Russia diverting oil towards Asia and US pledging to drill more oil and gas, India’s relations with the supplying nations seem to be evolving.

Under the shadows of a reciprocal tariff plan by the US, Prime Minister Modi and President Donald Trump on February 14 discussed strengthening energy ties between the countries, along with other bilateral issues. Trump said the US would ‘hopefully’ become India’s top oil and gas supplier, during a press briefing after the meeting.

Oil Minister Hardeep Puri hinted that energy imports from the US are likely to witness an uptick, but the final commercial arrangements would depend on further discussions.

“It (higher energy offtake from US) could well be, but it's not for me to speculate till the discussion takes place, and the kind of commercial arrangements after that. By the way, we are already buying $20 billion of energy from the US,” Puri said.

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India’s traditional suppliers of crude oil have been Middle-Eastern countries, including Saudi Arabia and Iraq. Russia, however, had recently become the largest oil supplier to India on the basis of discounts being offered. Russia has started to contribute over 30 percent of the total India’s oil import in recent months, compared to just 0.2 percent before the Ukraine war that started in 2022.

With US imposing fresh sanctions Russian oil suppliers and tankers in 2025, availability of their crude oil has been temporarily affected.

“There are some Russian entities which came under sanctions but Russian oil was never under sanction. My understanding is that there was a price cap, and we complied with the price cap. So, we are a responsible international player. We'll see how it goes. If there are processes of peace, then I think some of these tension points will ease, and more and more energy availability will take place,” Oil Minister Puri said.

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Hardeep Puri underscored that India remains a major energy player, as the third-largest consumer and fourth largest refiner of crude oil in the world.