India's crude oil import dependence reaches record high

India's reliance on imported crude oil has reached its highest level ever. For the fiscal year ending March 31, 2025, the country imported 88.2% of the crude it consumed from April 2024 to February 2025. This is an increase from 87.7% during the same time period in the previous year. The demand for fuel in India continues to grow, while domestic oil production remains steady. India is currently the world's largest driver of oil demand, surpassing China. This change has occurred as China sees a decline in gasoline and diesel use due to the rise of electric vehicles. To meet the rising demand, Indian refiners are seeking funding to build new refineries. They aim to expand their capacity to supply fuel to a growing middle class in the country. However, India's increasing dependence on oil imports makes it vulnerable to price fluctuations. India has turned to cheaper Russian oil, especially since the invasion of Ukraine and subsequent sanctions against Russia. As a result, Russia has become India's biggest oil supplier. In March, imports of Russian crude have started to increase again after a dip earlier this year due to U.S. sanctions. Traders are using non-sanctioned tankers to deliver Russian oil, which has become more affordable as prices have dropped below the G7's $60 per barrel cap. This allows Western companies to get involved in the trade, helping India secure the crude it needs.