As the United States intensifies sanctions on Russia, India is seeking alternative sources of supply, with refiners having purchased approximately 7 million barrels of U.S. crude oil for loading in April.

Due to the increased sanctions by the U.S. on Russia, which have restricted India's oil trade with Russia, the amount of U.S. crude oil purchased by Indian refiners is expected to reach the highest level in nearly a year.

Unnamed traders said that so far this month, Indian state-owned oil companies Bharat Petroleum Corp. and Indian Oil Corp., along with the largest private refiner, Reliance Industries Ltd., have purchased about 7 million barrels of U.S. crude oil for loading in April. According to Kpler, this will be the largest monthly import volume since last May.

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Following the outbreak of the Russia-Ukraine conflict, India's crude oil imports from Russia surged. Although Russia remains India's largest crude oil supplier, stricter U.S. sanctions have led to delays in Russian crude oil and a reduction in discounts.

India has recently increased its procurement of Saudi crude oil.

Bharat Petroleum Corp., Indian Oil Corp., and Reliance Industries Ltd. did not immediately respond to emails seeking comment.

Traders said that most of the U.S. crude oil purchased this month is WTI Midland crude, which is more expensive than Middle Eastern crude on a delivered cost basis. The supply disruption of Russian Sokol crude (equivalent in price to WTI Midland oil) is the most severe amid the U.S.'s intensified sanctions on Russia.

Indian refiners' officials stated that WTI Midland crude can be used to produce more gasoline and diesel. Due to factors such as local elections, increased power generation, and crop harvesting, it is expected that India's consumption of gasoline and diesel will increase in the coming months.

Analyst Dylan Sim from the industry consulting firm FGE said, "Given the issues faced in importing Sokol crude, it is not surprising that Indian refiners are turning to U.S. WTI Midland as a substitute for Russia's low-sulfur crude oil."Sim stated that in 2021, American crude oil accounted for 10% of India's imports, but over the past two years, as Russia's crude oil market share in India has expanded, the proportion of American crude oil in India's imports has dropped to 4%. Other varieties of Russian crude oil, including Urals crude from the country's western ports, have also been affected by the stricter enforcement of Western sanctions. Two tankers carrying this type of crude oil have been idle off the coast of India for several weeks.

Data compiled by Bloomberg from Kpler indicates that India imported approximately 40 million barrels of Russian crude oil last month, which is nearly 30% of the country's total petroleum and condensate purchases. In 2023, the average market share of Russian crude oil in India reached 39%.