Months after Washington and New Delhi’s ties worsened over Moscow’s oil imports, U.S. President Donald Trump said Wednesday that Prime Minister Narendra Modi had promised him that India would no longer purchase oil from Russia.
Trump told reporters at a White House event, “So I was not pleased that India was purchasing oil, and he (Modi) guaranteed me today that they would not be buying oil from Russia.” Adding that India could not “immediately” stop supplies, Trump told reporters that it was “a little bit of a process, but that process will be finished shortly.”
Oil Prices Rise After Trump’s Remarks
In early trading on Thursday, oil prices increased by around 1% in response to Trump’s remarks. At 0046 GMT, Brent oil futures increased by 57 cents, or 0.9%, to $62.48 a barrel. Additionally, U.S. West Texas Intermediate (WTI) futures increased by 54 cents, or 0.9%, to close at $58.81.
Russia-India Oil Trade
The two biggest consumers of Russian seaborne crude exports at the moment are China and India, who take advantage of the lower prices Russia has been forced to accept after European buyers avoided buying and the United States and the European Union sanctioned Moscow for its February 2022 invasion of Ukraine.
Since Trump placed a 50% tax on products from the South Asian country in response to New Delhi’s imports of Russian oil, ties between the US and India have been tense. After Trump proposed charging a $100,000 fee for new H-1B visa applications—which are mostly used by Indian computer professionals to get jobs in the US—ties deteriorated.
Will India Purchase More US Oil?
Trade Secretary Rajesh Agrawal, who is in charge of India’s restarted trade talks with the US, said on Wednesday that India has the ability to buy an extra $15 billion worth of oil from the US.
India’s Trade Secretary Rajesh Agrawal told reporters in New Delhi on Wednesday that data over the last several years indicates an increase in energy purchases from the US.
According to FY25 numbers, we are now at an average of $12–$13 billion, and with the present refinery layout, there is headroom for a further $14–$15 billion, he added.
India-US Trade Balance
India’s trade imbalance reached $32.15 billion in September, the most in over a year, although exports increased 6.7% from the previous year despite the US levying the highest tariffs in Asia on Indian products.
New Delhi-Moscow Oil Ties
India’s main oil source is Russia. About a third of India’s oil imports, or 1.62 million barrels per day, came from Moscow in September. Indian authorities defended the acquisitions as essential to the country’s energy security, but PM Modi resisted US pressure for months.
India’s decision to halt imports would represent a significant change by one of Moscow’s largest energy consumers and would change the equation for other countries that continue to acquire Russian petroleum. Instead of depending just on global penalties, Trump intends to use bilateral ties to impose economic isolation on Russia.
Diplomatic Developments Continue
The declaration follows a meeting between Modi and Sergio Gor, Trump’s new choice for Indian ambassador. The two spoke about commerce, technology, and defense.
Trump has mostly avoided applying the same pressure on China as he has on India. Trump is hesitant to take the risk of escalation by calling for a stop to Chinese energy imports from Russia, which has hindered diplomatic efforts in the U.S. trade dispute with Beijing.