Current Affairs · · Prelims · Economy

Three suppliers now provide two-thirds of India's crude oil imports

Russia, the United States and the UAE supplied about two-thirds of India's crude oil import volume in August 2026, Commerce Ministry data show. Russia remained the largest supplier at about 44%. The concentration reverses years of efforts to spread purchases across many suppliers.

Event date:

REq1
  1. Note1 / 6

    WHY IN NEWS?

    • A The Hindu analysis of Commerce Ministry data shows three countries supplied about 66.85% of India's crude import volume in August 2026.
    • Russia supplied about 44%, down from July.
    • The US sharply increased shipments to India in August.
    • The three also accounted for about two-thirds of the month's oil import bill.
  2. Note2 / 6

    HOW CONCENTRATION BUILT UP

    • Before February 2022, Russia supplied only a small share of India's crude.
    • After the Russia-Ukraine war, discounted Russian oil made it India's largest supplier by 2023.
    • Disruptions in West Asia in 2026 pushed Russia's share higher still. Gulf supplies faced longer routes.
    • India imports more than 85% of the crude it uses. So the source mix directly affects energy security.
  3. Note3 / 6

    KEY CONCEPTS

    1. What is energy security?

    It is reliable access to energy at an affordable price. For an importer like India, it depends on where oil comes from, how it travels and what it costs.

    1. Why is supplier concentration risky?

    If one supplier faces sanctions, war or shipping disruption, a large share of supply is hit at once. Spreading purchases across many suppliers limits the damage.

    1. What is a strategic petroleum reserve?

    It is an emergency stock of crude oil held for supply shocks. India's reserve holds about 5.33 million tonnes at Visakhapatnam, Mangaluru and Padur.

  4. Note4 / 6

    THE TRADE-OFFS

    This card sets out the competing considerations. It does not adjudicate between them.

    • Cost: Discounted Russian crude has lowered India's import bill and inflation pressure.
    • Sanctions risk: Proposed US legislation threatens tariffs on countries buying Russian oil.
    • Price: US crude reportedly costs more than India's average import price. Buying more of it can be partly a diplomatic choice.
    • Logistics: Shorter, safer routes matter as much as price when sea lanes are disrupted.
  5. Note5 / 6

    WAY FORWARD

    These are suggested measures, not approved policy.

    • Diversify suppliers across West Africa, Latin America and the Gulf through term contracts.
    • Expand strategic storage so a supply shock does not force panic buying.
    • Raise domestic output of oil, gas and biofuels.
    • Speed the energy transition to cut long-run dependence on imported crude.
  6. Note6 / 6
    Graph

Sources

Syllabus

PaperSubjectSub-topic
PrelimsEconomyEconomy and energy terms: crude oil imports, strategic petroleum reserves, IEA status
GS3EconomyIndian Economy; energy security; external sector
GS2International RelationsIndia's relations with Russia, the US and West Asia

Topics

External Sector of IndiaIndustryInternational Relations and Current Affairs

Related previous-year questions

Asked in earlier UPSC Prelims papers on this topic. Answer, then check.

  1. UPSC Prelims 2011 · Indian Economy · External Sector of India

    In the context of global oil prices, “Brent crude oil” is frequently referred to in the news. What does this term imply? 1. It is a major classification of crude oil. 2. Its is sourced from North Sea. 3. It does not contain sulphur. Which of the statements given above is/are correct?

    1. 2 only
    2. 1 and 2 only
    3. 1 and 3 only
    4. 1, 2 and 3
    Show answer

    Answer: B. Correct Answer: 1 and 2 only Brent crude oil is a major global crude oil benchmark and is sourced from the North Sea, but it is not completely sulphur-free. Statement-wise Explanation 1. It is a major classification of crude oil — Correct Brent crude is one of the most important global benchmarks for crude oil pricing. It is widely used in international oil trade. 2. It is sourced from the North Sea — Correct Brent crude comes from oil fields in the North Sea, mainly between the United Kingdom and Norway. 3. It does not contain sulphur — Incorrect Brent crude is called sweet crude because it has low sulphur content. However, it is not sulphur-free. It contains a small amount of sulphur. Extra UPSC Info Major crude oil benchmarks include Brent, WTI and Dubai/Oman. Sweet crude means low sulphur content. Sour crude means high sulphur content. Light crude has low density and is easier to refine. Brent is important for India because global oil price changes affect inflation, current account deficit, fiscal deficit and fuel prices. Final Takeaway Brent crude is a major crude oil benchmark sourced from the North Sea. It is low in sulphur but not sulphur-free. Therefore, statements 1 and 2 only are correct.

    Difficulty: hard · statement

    Open this question on its own page, with the full explanation →

  2. UPSC Prelims 2025 · Indian Economy · Industry

    Consider the following activities: I. Production of crude oil II. Refining, storage and distribution of petroleum III. Marketing and sale of petroleum products IV. Production of natural gas How many of the above activities are regulated by the Petroleum and Natural Gas Regulatory Board in our country?

    1. Only one
    2. Only two
    3. Only three
    4. All the four
    Show answer

    Answer: B. Statement I – INCORRECT: Production of crude oil is outside PNGRB regulatory scope. Statement II – CORRECT: PNGRB regulates refining, storage and distribution. Statement III – CORRECT: Marketing and sale are regulated. Statement IV – INCORRECT: Production of natural gas is excluded. Correct answer: Option (b).

    Difficulty: medium · statement

    Open this question on its own page, with the full explanation →

Practice questions

  1. India's strategic petroleum reserve facilities are located at:

    1. Visakhapatnam, Mangaluru and Padur
    2. Jamnagar, Kochi and Paradip
    3. Mumbai, Chennai and Haldia
    4. Kandla, Vadinar and Ennore
    Show answer

    Answer: A. The three underground caverns hold about 5.33 million tonnes of crude.

    Difficulty: easy · statement

  2. Consider the following statements: 1. India is a full member of the International Energy Agency. 2. India imports more than 85% of its crude oil requirement. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both
    4. Neither
    Show answer

    Answer: B. India is an IEA association country, not a full member.

    Difficulty: medium · statement

  3. In August 2026, which country was India's largest crude oil supplier?

    1. Iraq
    2. Saudi Arabia
    3. Russia
    4. United States
    Show answer

    Answer: C. Russia supplied about 44% of India's crude import volume.

    Difficulty: easy · statement

Mains practice

Answer-writing practice on this article. Attempt it first, then open the hints.

  1. GS3 · 250 words

    India's crude imports have become concentrated among a few suppliers. Examine the risks to energy security and suggest a strategy to balance cost, diplomacy and supply reliability.

    Show hints
    1. Discounts vs sanctions
    2. shipping routes
    3. SPR, term contracts
    4. domestic production
    5. energy transition.