India’s state-run oil giant has shifted its crude sourcing strategy, turning to Nigeria and the Middle East while bypassing U.S. supplies as trade tensions with Washington escalate.
Trading sources confirmed that the Indian Oil Corporation (IOC) excluded American grades in its latest tender. Instead, IOC purchased two million barrels from Nigeria and another one million barrels of Abu Dhabi’s Das grade from Shell. The Nigerian cargoes—one million barrels each of Agbami and Usan—came from TotalEnergies.
The shipments are expected to reach Indian ports between late October and early November, a sharp contrast to IOC’s previous tender, which secured five million barrels of U.S. West Texas Intermediate (WTI).
Nigeria’s Output Recovery
Nigeria recently raised crude production above 1.7 million barrels per day (bpd), its highest in seven months and a 16.6% rebound from September 2024 levels. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) credited the recovery to tighter security in the Niger Delta, which cut oil theft from about 300,000 bpd to fewer than 5,000 bpd.
Rig activity also surged, with 46 rigs now active compared to only eight in 2021. The rebound has drawn renewed interest from international oil companies, especially in deepwater projects. Since crude exports generate nearly two-thirds of government revenue and more than 80% of foreign exchange inflows, the increase offers Nigeria a chance to ease fiscal pressure, strengthen reserves, and stabilise the naira.
India’s Energy Strategy and U.S. Pressure
For India, the purchases mark a recalibration of its import mix. Since 2022, New Delhi has leaned heavily on discounted Russian crude, becoming Moscow’s top seaborne customer after Europe and the U.S. imposed sanctions over the Ukraine war. That strategy, however, has strained relations with Washington.
U.S. President Donald Trump, now back in office, recently imposed a 50% tariff on Indian goods, accusing New Delhi of “funding Moscow’s war effort” through its oil trade. Treasury Secretary Scott Bessent also criticised India for profiting by reselling refined fuels from discounted Russian crude.
India has resisted the pressure. Finance Minister Nirmala Sitharaman said on CNN-News18 that as the world’s third-largest oil importer, the country will continue to “buy from the place which suits our needs—whether in terms of rates or logistics.”
“Whether it is Russian oil or anything else, it’s our decision,” she said. “We spend most of our foreign exchange on crude oil and refined fuels. We will undoubtedly be buying it.”
Meanwhile, Washington has urged New Delhi to resume trade talks and align more closely with U.S. energy policy. Commerce Secretary Howard Lutnick said on Friday: “We’re always willing to talk… We are the consumers of the world.”
Crude oil and refined products accounted for about a quarter of India’s total imports in the fiscal year ending March 2025, underscoring the central role of energy in its trade strategy and foreign policy.
