New Delhi: Indian Oil Corporation (IOC), the largest oil company in India, has executed a substantial strategic shift because of changing global energy patterns in conjunction with rising geopolitical conflicts. IOC paused its ongoing talks about buying crude oil from Russian state-owned Rosneft while it elevated the purchase of crude oil and LNG from the United States. The shift coincides with India’s strategies to reduce the trade deficit with the United States since President Donald Trump applied a 26% import tariff.
Suspension of Russian Oil Deal
IOC Chairman A.S. Sahni confirmed that the organization halted talks with Rosneft because of market conditions regardless of any governmental influence. According to Sahni,, the company maintains open discussions with Rosneft when market conditions indicate good opportunities. India chose Russia as its leading crude oil supplier during 2022 when the Ukraine war started because of generous discounts making their supply desirable. IOC imported crude oil from Russia to make up 31% of its total crude oil purchases during fiscal year 2023-24. The decrease in Russian commercial incentives has diminished its attractiveness in the market,, causing its market share to drop down to 22% in 2024-25. The company strategy at IOC focuses on acquiring goods from multiple suppliers bycting the optimal combination of rate, product standards,, and market dynamics.
Focus on U.S. Energy Imports
India above all wishes to balance its trade surplus with Washington,, which stands as one of the main priorities for the Trump administration,, thus prompting India to pursue increased energy imports from the U.S. The demand from Indian refinery companies for U.S. crude oil increased 67%,, trailing the previous month in March 2025,, as they expanded their reliance on American supply lines. The U.S. recently became India’s fifth big crude oil supplier after transferring 218,400 barrels each day in the first month of 2025 compared to 70,600 barrels daily in December 2024. Moving forward,, IOC agreed to buy 2.5 million tonnes of LNG from Trafigura through 27 ship deliveries beginning in the second part of their current fiscal period under a five-year $1.4 billion contract. The contract price uses the U.S. Henry Hub index,, which enhances chances of accessing American LNG supplies,, though Sahni did not disclose any specific contractual obligations for U.S. suppliers.
Navigating Global Market Volatility
IOC takes a protective stance when planning long-term contracts because of worldwide market volatility. Company policy indicates to to Sahni that these spot oil acquisitions represent a preferred option because Russian oil supply encounters operational hurdles from U.S. tanker and energy sector sanctions. The tender-based procurement of Russian crude remains viable for IOC,, provided the offers match or exceed market pricing,, yet the company builds its import sources beyond single suppliers. Middle Eastern oil imports doubled in January 2025 to achieve 2.7 million bpd levels while Iraq held the position of India’s second-largest supplier and Saudi Arabia and the UAE took third and fourth places,, respectively. The expansion of crude import sources matches India’s goals of achieving decreased import dependence because the domestic crude output currently supplies only 13% of demand for 2023-24.
Trade Deficit and Geopolitical Context
The increase of U.S. energy imports represents a strategic decision that stems from Trump’s trade policies to decrease the ongoing $35.33 billion trade deficit with India between 2023-24. India has initiated the plan to eliminate import taxes on U.S. LNG while boosting purchases as a way to minimize trade tensions following President Trump’s threat of secondary tariffs against Russian oil purchasers. India faces difficulties managing its crude import dependence on Russia at 40% because of announced U.S. import tariffs in March 2025,, which target Russia to achieve a Ukraine ceasefire. India shows its willingness to overcome energy supply challenges through the Trafigura deal and increased U.S. crude imports as it works to secure its energy needs.
LNG as a Growing Priority
The increase of LNG imports serves as a key component for India to achieve its target of raising natural gas consumption from 6% to 15% throughout 2030. India imported 31.8 billion cubic meters of LNG from supply sources during the 2023-24 financial period,, where the United States occupied the second position following Qatar. IOC benefits from the Trafigura agreement that references the Henry Hub index since this enables access to cost-efficient U.S. LNG supplies. The transaction proceeds in line with India’s energy diversification plans that also include extended contracts with Qatar and ADNOC in Abu Dhabi while speeding up the development of gas infrastructure to serve rising fuel requirements.
A Pragmatic Energy Strategy
IOC has restructured its strategy because it concentrates on maintaining adaptability while the global markets experience volatility. IOC has declared both a suspension of Rosneft business dealings and a strategicic preference for U.S. LNG and crude markets to achieve economic and political equilibrium. The strategy that Indian Oil Corporation has adopted to diversify suppliers through spot purchase deals allows the company to protect its energy security while handling U.S. trade policies, including Russian oil sanctions and tariff threats.