The meeting between US president Donald Trump and Prime Minister Narendra Modi, which is expected to boost cargoes of US oil and gas by up to 67 per cent, broadens avenues for importing liquefied natural gas (LNG).
Foreign Secretary Vikram Misri has indicated that oil and gas purchases from the US can grow to $25 billion annually from around $15 billion last year.
Analysts and industry executives too indicate higher US LNG volumes coming to India. Besides, crude oil purchases would also increase. The US is the fifth largest crude supplier to India, which accounted for 10.3 per cent of global imports in 2023.
India generally buys light sweet crude and West Texas Intermediate (WTI) from the US. However, growth in imports would be subject to factors such as type of crude oil, discounts and freight.
- Also read: PM Modi Trump Meeting Highlights
A top government official said the partnership underscores three key words — affordability, reliability and stability.
The joint statement issued by both countries underscored the “importance of US-India collaboration to ensure energy affordability, reliability and availability and stable energy markets”.
LNG gets a boost
Oil Minister HS Puri at the concluding ceremony of the India Energy Week (IEW) 2025 on Friday said, “We have a substantive energy relationship with the US especially on natural gas. I see definitely those quantities being increased.”
Ashwin Jacob, Partner and Energy, Resources & Industrial Industry Leader at Deloitte India, pointed out that international gas market dynamics are slightly different from oil, and the US has emerged as the predominant LNG exporter in recent times, thanks to the fact that it produces a large quantity of ‘associated gas’, which it exports at very competitive commercial terms.
“Given India’s thrust towards increasing gas in its energy basket, the commitment from both countries to grow US gas exports to India will be good for ensuring energy security,” he added.
More crude
The US already supplies between 2.5-3.5 per cent of India’s crude oil needs, most of which is light and sweet, which suits India’s need to continue producing diesel and gasoline in high volumes. Therefore, the news of both countries striving to make the US a leading supplier of crude oil to India is great news, said Jacob.
ICRA’s Vice President & Co-Group Head (Corporate Ratings) Prashant Vasisht pointed out that Indian refiners would procure oil from the US mostly based on supply being economically competitive with other sources.
On higher logistics costs, he explained: “India has procured from the US and the economics of each type of oil is compared including yields, freight, working capital blockage etc. So, it is not a given that more distant oil will be pricier as we procure from Brazil, etc and demand of oil dictates prices”.
- Also read: Prime Minister Modi invites US universities to open campus in India during Trump meeting
Vasisht opined that higher ranking of the US in the import table could happen if prices and supply terms are competitive and it makes economic sense to buy significantly higher (crude oil) from US.
Indian refiners are sophisticated buyers of crude and have always considered options that provide best refining margins while ensuring supply security, Jacob said. “As a result, Indian refiners have looked at Russia to access discounted crudes over the last 2-3 years besides the Middle East, which is the origin of approximately half of India’s crude needs. The availability of more volumes of US crude oil will ensure that other global crude suppliers (including Russian ones) to India continue to remain price competitive, which will be good for India’s energy import bill,” he added.