October 15, 2026: West Asian producers led by the UAE, Iraq and Saudi Arabia will continue to be India’s leading energy suppliers once the war ends and cannot be replaced by the United States, three senior refining officials told Business Standard, as US oil and gas supplies fell sharply in September from this year’s high in May.
 
Indian imports of crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG) from the US declined 43 per cent in September to a combined 1.22 million tonnes from 2.13 million tonnes in August, marking the lowest level since April, according to ship-tracking data accessed by Business Standard.
 
Despite the West Asia conflict disrupting India’s energy supplies since March and forcing Indian refiners to seek alternative sources, US oil and gas supplies fell marginally from September 2025.
 
They also declined by more than half from a two-year high of 2.86 million tonnes in October 2025. In value terms, this translates into billions of dollars in reduced purchases.
 
Imports of oil and gas from West Asia surged 67 per cent in September from August to 13.56 million tonnes, ship-tracking data accessed by Business Standard showed.
 
October imports so far are close to 6 million tonnes and may exceed September’s purchases, according to projections by maritime intelligence agency Kpler.
 
Gulf oil exports rebounded to roughly 16.5 million barrels per day (bpd) in September, near pre-war levels, despite only 60 per cent of those barrels crossing the Strait of Hormuz compared with 83 per cent before the war.
 
Saudi Arabia, the UAE and Iraq adapted through pipelines, bypass ports and extensive ship-to-ship transfers, trade journal OilPrice said, citing a note by Standard Chartered.
 
Iran’s ability to choke off regional oil exports has consequently weakened, it added.
 
Senior officials from state-run refiners said that while Washington was urging New Delhi to increase energy imports, the government had not issued any instructions on where to buy crude, LPG or LNG from. Economics remained the key consideration, they said.
 
Record freight rates and limited supplies of medium sour crude grades from the US — the grades most suited to India’s complex refineries — have made imports of light sweet premium US crude less attractive to Indian refiners compared with Russian oil, the officials said.
 
Crude oil imports from the US in October declined by around 30 per cent to 91,000 bpd compared with the whole of September, according to Kpler.
 
Hiring rates for Very Large Crude Carriers (VLCCs), which can carry around 2 million barrels of crude, have jumped more than 20-fold from pre-war levels to nearly $1.5 million a day from $50,000-$75,000 in early 2026, a shipbroker from Abu Dhabi told Business Standard.
 
Transportation and insurance now constitute 20-25 per cent of the value of a crude consignment compared with less than 5 per cent before the war, two refining officials said.
Trade agreement hiccups
The sharp decline in crude imports comes even as India and the US face hurdles in concluding a bilateral trade agreement, where higher energy purchases are a key demand of US President Donald Trump.
United States Trade Representative Jamieson Greer has said signing a deal was not “imminent” because of a “universe of items that are sticking points”.
 
Trump’s energy agenda has focused on policies enabling higher US oil and gas production while urging Europe, India, China and other Asian economies to buy more US energy as part of bilateral trade agreements.
 
The European Union has stepped up purchases, with the US supplying a majority of its LNG and diesel. China also concluded a long-term LNG import contract during President Xi Jinping’s visit to Washington this month.
 
There has, however, been little progress in efforts by Indian state-run oil companies to conclude LNG or crude import deals with the US, with current purchases remaining “opportunistic”, a senior refining official said.
 
Speaking at the Munich Security Conference this month, Finance Minister Nirmala Sitharaman said talks were still under way for an India-US trade deal.
 
“Although we’d like to believe that both the sides have reached a plateau beyond which giving or taking might be very, very difficult. But maybe if there are room to operate from, both sides could do it,” she said.
 
That room is slowly shrinking.
 
Trump signed into law last month the Lindsey O Graham Sanctioning Russia and Iran Act of 2026, giving him the authority to impose tariffs of up to 100 per cent on countries, including India and China, that continue buying Russian oil and gas.
 
Overall imports of US fossil fuels, excluding coal, exceeded 2 million tonnes three times in the past six months, with May supplies at 2.58 million tonnes, the second-highest in five years after 2.86 million tonnes in pre-war October 2025, Kpler data showed.
 
But imports slowed considerably in September and October, the data showed.
 
Besides high freight costs and travel times of more than 45 days from the US — with vessels detouring around the Horn of Africa to avoid Houthi attacks around the Suez Canal route — supplies of medium sour grades from West Asia have surged in recent weeks.
 
That has benefited Indian refiners and reduced their need to buy from alternative sources. 

(Source: Business Standard)