India's crude import bill saw a significant increase of 14.7%, reaching $60.6 billion from April to August 2024, compared to $52.8 billion during the same period in the previous fiscal year. This rise in expenditure coincided with a 3.2% increase in crude oil imports, totaling 101.6 million tonnes. Notably, August alone accounted for 19.9 million tonnes of imports, valued at $11.6 billion, marking a 6.4% year-on-year increase [8f445f88].
Despite these increases, India's dependency on crude oil imports rose to 88.1%, up from 87.8%. Domestic crude production experienced a slight decline, totaling 12.1 million tonnes. In response to these trends, the Indian government has set ambitious goals to expand the explored sedimentary basin area from 10% to 16% by the end of 2024, with upcoming bids for oil and gas assets expected in early 2025 [8f445f88].
In a recent statement, Union Petroleum Minister Hardeep Singh Puri indicated that India is looking to increase oil production from the US, Canada, and Brazil to stabilize global oil markets and mitigate price volatility. Brazil is projected to add between 300,000 to 400,000 barrels per day, while the US could contribute an additional million barrels. Puri emphasized India's ambition to become the third-largest economy by 2028 and a developed nation by 2047, relying on stable energy supplies [ef660b33].
In the context of these developments, India's monthly oil imports from Russia decreased slightly in June, while imports from the US reached their highest level since February 2022. Indian refiners collectively imported 1.98 million barrels per day (bpd) of Russian oil in June, a 3.7% decrease from the previous month, although this represented a 1.2% annual increase during the first fiscal quarter that ended on June 30 [a6cbff24].
The shift in oil imports reflects India's strategic approach to diversifying its sources and reducing reliance on a single supplier. Imports from Iraq dropped to their lowest level since September 2020, while imports from Saudi Arabia increased by 9.7%. The United States has now become India's fourth-largest supplier of crude oil [a6cbff24].
Puri also discussed India's energy transition strategy, highlighting the growth of Central Public Sector Enterprises (CPSEs), with net worth increasing from Rs 9.5 trillion in FY14 to Rs 17.33 trillion in FY23, and net profit rising from Rs 1.29 lakh crore to Rs 2.41 lakh crore in the same period. Additionally, he noted the rise in ethanol blending from 1.53% in 2014 to 15% in 2024, with a goal of reaching 20% by 2025 [ef660b33].
As global oil prices fluctuate, with Brent crude averaging $80.91 per barrel in August, analysts predict lower crude prices due to an expected surplus by 2025, which may further influence India's import strategies [8f445f88].