With Indian oil refiners intensifying their crude diversification efforts amid the growing weaponisation of commerce tariffs by US President Donald Trump towards New Delhi, one other nation focused by Trump seems keen to spice up oil commerce with India. India’s crude oil imports from Brazil—which, like India, faces 50 per cent tariffs from the US—posted the best development amongst all oil suppliers within the first six months of the 2025, and have grown farther from there, in accordance with an evaluation by S&P World Commodity Insights (SPGCI).
“Sky-high US tariffs are prompting India and Brazil to discover alternatives to spice up oil commerce, as New Delhi seems to be for options to Russian oil, whereas Brazil scouts for newer markets for its rising crude output…Russian oil flows to India proceed, however Indian refiners are making ready for the worst by persevering with to diversify their sources, a transfer that would result in Brazilian crude flows to India,” SPGCI stated in a notice. Thus far this 12 months, Brazil has been India’s ninth largest provider of crude oil.
Indian refiners’ hefty imports of Russian crude have surfaced as a significant irritant for the Donald Trump administration. Trump not too long ago introduced a further 25 per cent tariff—over and above the 25 per cent tariff introduced earlier on Indian items—as a penalty for India’s Russian oil imports. New Delhi has known as the focusing on of India over the acquisition of Russian oil “unjustified and unreasonable” and stated these imports started as its conventional provides have been diverted to Europe, with the US having “actively inspired such imports by India for strengthening world vitality markets stability”.
Trump has additionally focused Brazil with a 50 per cent tariff over what he has termed as a “witch hunt” towards former Brazilian President Jair Bolsonaro, who’s seen as an ally of Trump. Notably, Prime Minister Narendra Modi spoke with Brazilian President Luiz Inacio Lula da Silva shortly after Trump introduced the extra tariff on Indian items.
India has said over time that as a rustic that is determined by vitality imports, it’s going to purchase oil from wherever it will get deal, so long as the oil isn’t beneath sanctions. To make sure, Russian oil isn’t beneath sanctions, and is barely topic to a value cap imposed by the US and its allies that applies if Western delivery and insurance coverage providers are used for transporting the oil.
India’s prime’s 10 crude oil suppliers in H1 2025
Thus far, India has not issued any advisory or directive to its refiners with respect to their Russian oil purchases. However, New Delhi seems keen to extend import volumes from different suppliers to strengthen its vitality safety and maintain dependencies on one or a small group of suppliers in test. Russia is at the moment India’s largest provider of crude oil and accounts for 35-40 per cent of India’s complete oil imports by quantity. In all, India’s oil import basket consists of crudes from round 40 nations already, though a bulk of the provides are from Russia and West Asia.
“Brazilian crude exports to India will probably be carefully watched within the coming months, significantly as each nations navigate the affect of US tariffs associated to Russian oil imports,” stated Benjamin Tang, head of liquid bulk at S&P World Commodities at Sea.
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Whereas freight, arbitrage alternatives, and availability of spare cargoes would decide the industrial viability of Brazilian crude amongst Indian refiners, rising diplomatic efforts between the governments of India and Brazil are anticipated to yield optimistic outcomes. Though India and Brazil are evidently pushing for extra crude oil commerce, a number of logistical and pricing challenges persist, together with competitors from West Asian oil suppliers, who’re situated a lot nearer to India and have been the standard mainstay of India’s oil imports. India may additionally face extra competitors for Brazilian oil from China.
Crude inflows to India from Brazil jumped about 75 per cent year-on-year in January-June to 72,000 barrels per day (bpd) from 41,000 bpd, signaling a rising affinity of Indian refiners for crudes from oil producers that aren’t a part of the worldwide cartel OPEC, in accordance with SPGCI. Over time, Brazil has emerged as a significant non-OPEC oil provider. Public sector refining main Indian Oil Company (IOC) and personal sector big Reliance Industries (RIL) have been the first patrons of Brazilian crude.
SPGCI famous that each Modi and Petroleum Minister Hardeep Singh Puri visited Brazil in current months to debate how India can enhance crude oil imports from the South American nation and discover alternatives for collaboration on offshore deep and ultra-deepwater exploration and manufacturing initiatives.
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