On the sidelines of the Shanghai Cooperation Organization (SCO) summit, Indian Prime Minister Narendra Modi and Iranian President Ebrahim Raisi are likely to discuss the revival of oil imports from Iran. After the U.S. ended waivers that allowed the import of crude from Iran without sanctions, India stopped buying oil from Iran in FY19. In the immediate years before the ban, Iran was India’s third biggest source of crude oil. In fact, between FY07 to FY09 Iran was the second-biggest source after Saudi Arabia. Interestingly, after Iran’s exit, India filled the void by importing oil from the U.S., the country which initiated the sanctions. However, in FY23, the U.S.’s share in India’s oil imports halved and Russia became the third-biggest source. Russia’s share in India’s crude oil imports was close to 14% in FY23. Notably, the last time Russia’s share was this high was in the late 1980s when it was still part of the Soviet Union. With international crude oil prices soaring, local consumption of petroleum products back to pre-pandemic levels and the U.S. calling for sanctions against Russia, Iran may make a comeback as a major oil partner for India.
Share of imports
The table lists the % share of a country in India’s total crude oil imports. Iran was the third biggest source before the ban in FY19. Currently, most of India’s oil is being imported from Iraq and Saudi Arabia, with Russia’s share surging ahead of the U.S.’s. In the table, years are shortened: 88 corresponds to FY1988, 00 is FY2000 and so on.
- In the 1990s, Nigeria and Kuwait were major sources of oil.
- The UAE, which was the second biggest source in the 1990s, recorded a decline thereafter. However, lately it has been picking up again.
Data were not available between FY01 and FY05
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The table lists the consumption of select petroleum products (in thousand metric tonnes) in India between FY18 and FY23.
In FY23, consumption has gone back to pre-pandemic levels
The data pertain to the April-August months of each year
The chart shows the monthly average crude oil prices (Indian basket) in $/barrel between FY01 and FY23.
Source: UN Comtrade, PPAC