Is the US arm-twisting India to buy its more expensive crude oil by threatening to slap it with economic sanctions for buying cheaper Russian crude oil?
Will India come under the bullying tactics of Washington and surrender to its pressure?
These questions have cropped up after US President Donald Trump asked Prime Minister Narendra Modi to buy more crude oil and natural gas when the two leaders met in the White House Friday.
India-US Deal On Importing Crude Oil?
Participating in a joint press conference after meeting PM Modi,
Donald Trump said that the two countries had struck an agreement on India importing more U.S. crude oil and natural gas to shrink the trade deficit between the two countries.
An analysis shows that India bought 140,000 barrels or about 2.7% of the 5.2 million crude oil exported by the US every day when Donald Trump became the US President for the first time in 2016.
By the time he left office in 2020, New Delhi’s share went up to 471,000 barrels or 5.5% of 8.5 million barrels.
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By the year 2023, India was importing 402,000 barrels of 10.2 million barrels of crude oil US exported.
Weeks before Donald Trump was sworn in as the 47th US President, India purchased US crude oil worth $133 billion or just 3.4% in November 2024.
India Under US Pressure Of Shrinking Trade Gap?
India enjoys an estimated trade surplus of $45 billion in the bilateral trade of $192 billion in 2024.
Donald Trump has put pressure on India to buy crude oil, natural gas and F-35 stealth fighter jets to shrink the trade gap.
He also expressed hope that the bilateral trade would zoom to $500 billion by 2030.
India To Suffer Losses If It Buys US Crude Oil
However, an analysis shows that India will suffer financial loss if it buys US crude oil.
Washington generally sells West Texas Intermediary Midland oil and the present price of this oil is $72.25 per barrel.
On the other hand, the average price of Ural oil in December 2024 was $62 per barrel.
It is cheaper for India because Russia gives a special discount to India.
After Russia invaded Ukraine in February 2022 and came under US and EU sanctions, India became the second biggest buyer of the Ural crude oil.
Indian imports of Ural oil skyrocketed in a jiffy from less than 1% of the total oil imported to almost 40% of the country’s total oil purchases.
New Delhi has come under immense pressure from the US as Washington has threatened all nations with dire consequences if they continue buying Russian goods or doing business with Moscow.
Will India Succumb To US Pressure?
The cost of the US crude oil may go further up because of the US Dollar getting stronger. On the other hand, it buys Russia in rupee, not in US Dollars.
If India buys crude oil from the US, it will suffer financial losses. In a way Donald Trump wants India to suffer economic losses and buy crude oil from his country, or else come under US actions.
Will India come under pressure from Donald Trump and buy US crude oil despite economic losses?
