U.S. Crude Exports to India Reach Highest Level in Over Two Years Amid Russia Sanctions

U.S. crude oil exports to India surged to their highest level in more than two years last month, according to ship tracking data, as Indian refiners sought alternative sources following tighter U.S. sanctions on Russian producers and tankers. The shift reflects changing global oil trade dynamics as countries navigate geopolitical tensions and economic pressures.

Data from Kpler indicated that the U.S. exported approximately 357,000 barrels per day (bpd) of crude to India in February. This marks a significant increase from last year’s figure of around 221,000 bpd. As the world's third-largest oil importer and consumer, India has been adjusting its supply sources to mitigate potential risks posed by Western sanctions on Russian oil shipments.

Impact of U.S. Sanctions on Russian and Iranian Oil

The sharp rise in exports to India underscores the growing influence of multiple rounds of U.S. sanctions imposed since October on vessels and entities involved in trading oil from Iran and Russia. These restrictions have disrupted traditional trade flows, forcing major importers to seek alternative suppliers.

India, which has traditionally relied on discounted Russian crude since Moscow’s invasion of Ukraine in 2022, has faced increasing challenges due to sanctions affecting the availability of Russian oil tankers and financial transactions. As a result, Indian refiners have turned to the U.S. for a more stable supply of crude oil.

Last month, India announced that its energy imports from the U.S. could potentially rise to $25 billion in the near future, up from $15 billion last year. This highlights the growing trade partnership between the two nations and India's strategy to ensure energy security through diversification.

Indian Refiners Seek More Light-Sweet Crude

"Indian refiners are actively working to diversify their crude sources, particularly seeking light-sweet barrels," noted Rohit Rathod, a senior analyst at ship tracking firm Vortexa.

He further explained that the recent sanctions on Russian vessels have only accelerated Indian buyers' move toward alternative suppliers. Light-sweet crude, such as West Texas Intermediate (WTI)-Midland, is preferred by Indian refiners due to its lower sulfur content, making it easier to process in refineries and aligning with India's push for cleaner fuel production.

Data shows that approximately 80% of the U.S. crude exported to India was light sweet WTI-Midland. Indian Oil Corp, Reliance Industries, and Bharat Petroleum Corp were among the top buyers, while leading U.S. sellers included oil producer Occidental Petroleum, energy giants Equinor and Exxon Mobil, and trading house Gunvor.

Despite the rising exports, neither the Indian nor American oil companies involved immediately responded to requests for comments.

U.S. Expands Crude Exports to Other Asian Markets

Beyond India, the U.S. has also increased crude oil exports to other major Asian buyers. In February, the U.S. exported a record-breaking 656,000 bpd of crude to South Korea, benefiting from shifts in trade patterns caused by China’s 10% tariff on U.S. oil. The tariff has prompted American oil to be rerouted to other buyers in the region, further strengthening trade ties between the U.S. and South Korea.

Meanwhile, U.S. crude exports to China dropped to just 76,000 bpd, one of the lowest volumes recorded in the last five years. This decline reflects China’s growing reliance on Russian and Middle Eastern oil and the broader impact of geopolitical tensions between Washington and Beijing.

The Future of U.S.-India Oil Trade

As global energy markets remain volatile, India’s pivot toward increased U.S. crude imports signals a long-term strategy to reduce dependency on any single supplier, ensuring a more resilient and diversified energy portfolio. Additionally, as India’s oil demand continues to rise—driven by rapid industrialization and population growth—the country will likely seek to strengthen its partnerships with stable, politically aligned energy suppliers like the United States.

While Russia remains a key player in India's energy mix, ongoing sanctions and logistical hurdles could further tilt trade in favor of U.S. crude exports. If current trends persist, the U.S. may play an even larger role in supplying energy to one of the world's fastest-growing economies.