{"id":80125,"date":"2025-12-29T11:06:17","date_gmt":"2025-12-29T05:36:17","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=80125"},"modified":"2025-12-29T11:59:47","modified_gmt":"2025-12-29T06:29:47","slug":"indias-oil-basket-how-geopolitics-reshaped-crude-imports","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-oil-basket-how-geopolitics-reshaped-crude-imports\/","title":{"rendered":"India\u2019s Oil Basket: How Geopolitics Reshaped Crude Imports"},"content":{"rendered":"<h2><b>India\u2019s Oil Basket Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s approach to energy security has steadily evolved from dependence on a few traditional suppliers to a more diversified and opportunistic sourcing strategy.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Once heavily reliant on Saudi Arabia and West Asia for nearly two-thirds of its crude imports, India has progressively broadened its oil basket to balance geopolitical risks with cost advantages.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In recent years, Russia has emerged as a major supplier, reflecting New Delhi\u2019s pragmatic diplomacy\u2014leveraging global disruptions to secure <\/span><b>discounted crude<\/b><span style=\"font-weight: 400;\"> while maintaining ties across rival blocs.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Overall, India\u2019s oil policy now prioritises flexibility, diversification, and economic prudence over fixed geopolitical alignments.<\/span><\/li>\n<\/ul>\n<h2><b>West Asia as the Backbone of India\u2019s Oil Imports<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Before 2005, India\u2019s energy security rested overwhelmingly on West Asia, which supplied over 70% of its crude oil, led by Saudi Arabia, Iraq, Iran, Kuwait and the UAE.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Although India gradually diversified its sources between 2005 and 2015\u2014adding African suppliers like Nigeria and Angola and limited volumes from South America\u2014West Asia remained dominant.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite this gradual broadening, more than 60% of the crude oil imported in 2011-12 came from seven West Asian nations:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Saudi Arabia (About 17% of the overall basket),\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Iran (11.3%), Iraq (10.5%),\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Kuwait (7%),\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">United Arab Emirates (9%),\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Oman (3.4%) and\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Qatar (3.3%).<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">African oil, mainly from Nigeria and Angola, formed a distant second, accounting for about one-fifth of total imports.<\/span><\/li>\n<\/ul>\n<h2><b>Iran Sanctions and the Reshaping of India\u2019s Crude Basket<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s long-standing oil ties with Iran faced a major disruption after international sanctions tightened around Tehran.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In June 2010, the <\/span><b>United Nations Security Council<\/b><span style=\"font-weight: 400;\"> imposed sanctions on Iran over concerns about its expanding nuclear programme.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This was followed in 2011 by <\/span><b>unilateral sanctions<\/b><span style=\"font-weight: 400;\"> from the United States, including restrictions on Iran\u2019s Central Bank and threats to penalise foreign banks purchasing Iranian crude.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Under mounting external pressure, India began scaling down imports from Iran. As a result, Iran\u2019s share in India\u2019s crude oil basket declined sharply\u2014from a double-digit level earlier to 7.1% in 2012\u201313, 5.8% in 2013\u201314, 5.7% in 2014\u201315, before a marginal rise to 6.2% in 2015\u201316.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This phase marked a crucial turning point in India\u2019s energy diplomacy, highlighting how geopolitical sanctions directly constrained sourcing choices despite economic considerations.<\/span><\/li>\n<\/ul>\n<h2><b>Iran Sanctions, Temporary Revival, and India\u2019s Diversification Push<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The easing of sanctions on Iran in 2016, after compliance with the United Nations Security Council\u2013approved nuclear agreement, briefly revived India\u2013Iran energy ties.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India increased crude imports from Iran to 12.7% in 2016\u201317, restoring Tehran\u2019s position as a major supplier.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, this recovery was short-lived. After Donald Trump assumed office and reimposed US sanctions in 2017, Iran\u2019s share in India\u2019s oil basket declined again to just over 10% in 2017\u201318 and 2018\u201319.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">By 2019\u201320, India drastically reduced Iranian crude purchases by 91.8%, reflecting both sanctions pressure and a conscious diversification strategy.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">New Delhi increasingly sourced oil from the United Arab Emirates and the United States, reducing vulnerability to single-source shocks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At present, India\u2019s oil import profile is far more diversified: 40\u201345% from the <\/span><b>Middle East<\/b><span style=\"font-weight: 400;\">, 8\u201310% from <\/span><b>Africa<\/b><span style=\"font-weight: 400;\">, and 10\u201312% from the <\/span><b>Americas<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<\/ul>\n<h2><b>Russia Emerges as India\u2019s Largest Crude Supplier<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A major shift in India\u2019s oil import basket occurred in <\/span><b>2022<\/b><span style=\"font-weight: 400;\">, following Russia\u2019s invasion of Ukraine in February that year.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The conflict triggered sweeping sanctions on Moscow by the <\/span><b>European Union<\/b><span style=\"font-weight: 400;\"> and the <\/span><b>United States<\/b><span style=\"font-weight: 400;\">, forcing Russia to redirect its crude exports at discounted prices.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India and China\u2014among the world\u2019s largest oil consumers\u2014continued buying Russian oil, guided by economic considerations rather than sanction regimes.<\/span><\/li>\n<\/ul>\n<h3><b>Sharp Rise in Russian Oil Share<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">According to India\u2019s Directorate General of Commercial Intelligence and Statistics (DGCIS), Russia became the largest contributor to India\u2019s crude basket starting FY 2022\u201323.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Russia\u2019s share jumped from less than 2% in 2021\u201322 to 21.6% in 2022\u201323, rising further to 35.9% in 2023\u201324 and 35.8% in 2024\u201325.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Currently, around one-third of India\u2019s total crude imports come from Russia.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Importantly, Indian refineries were technically \u201cwell-suited\u201d to process Russian crude, easing the transition.<\/span><\/li>\n<\/ul>\n<h3><b>Economics of Discounted Russian Crude<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The surge was supported by favourable pricing.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The price of Russian Urals crude fell from $79.41 per barrel in April 2022 to $66.49 per barrel in March 2025, improving refinery margins.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">During this period, the shares of traditional suppliers such as Iraq, Saudi Arabia, and the UAE declined only marginally, indicating diversification rather than displacement.<\/span><\/li>\n<\/ul>\n<h3><b>Why Russian Oil Is Hard to Replace<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">As per analysts, cutting Russian oil imports would be \u201cdifficult, costly, and risky\u201d for India.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Replacing Russian crude would require rapid sourcing from multiple suppliers at higher costs due to increased freight charges and weaker discounts.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Such substitution could compress refinery margins, raise retail fuel prices, fuel inflation, trigger political backlash, and strain refinery balance sheets and credit lines.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/www.thehindu.com\/business\/how-indias-oil-basket-has-changed-over-the-years\/article70443877.ece#:~:text=Over%2070%25%20of%20the%20crude,South%20America%2C%E2%80%9D%20he%20observed.\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s oil basket has shifted from West Asia to Russia amid sanctions and geopolitics. Learn how diversification, discounts, and diplomacy reshaped India\u2019s energy security.<\/p>\n","protected":false},"author":18,"featured_media":80178,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[4471,60,22,59],"class_list":{"0":"post-80125","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-indias-oil-basket","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/80125","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=80125"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/80125\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/80178"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=80125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=80125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=80125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}