U.S. Seeks Bigger Energy Foothold in India, Raising Concerns

Higher costs, refinery mismatches, and tight supply pose risks for New Delhi as it looks to replace Middle East and Russian energy sources.

Apr. 17, 2026 at 7:08am

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A minimalist abstract illustration using bold geometric shapes in primary colors to conceptually represent the tensions and trade-offs India faces in sourcing its energy needs from the U.S. versus traditional suppliers in the Middle East and Russia.As the U.S. pushes to expand energy exports to India, New Delhi must navigate the complex trade-offs between energy security and economic stability.Washington Today

The United States is ramping up efforts to sell more oil and gas to India, the world's third-largest energy market, as it grapples with supply disruptions from the Middle East and the loss of Iranian and Russian crude. However, replacing Gulf and Russian energy with American sources poses significant challenges for India, including high freight costs, refinery infrastructure incompatibility, and longer delivery times.

Why it matters

India is a major energy importer, and fuel accounts for a large share of its import bill. Any sustained rise in energy prices risks widening India's current account deficit and undermining its macroeconomic stability. The U.S. is pressing India to commit to significant energy purchases, but India must balance its energy security needs with the economic impacts of more expensive American supplies.

The details

The U.S. is seeking to sell more oil, gas, liquefied natural gas (LNG), liquefied petroleum gas (LPG), and other energy products to India as it faces supply disruptions from the Middle East and the loss of Iranian and Russian crude. However, replacing these sources with American energy is challenging for India due to higher freight costs, refinery infrastructure that is not fully compatible with U.S. crude, and longer delivery times. India is also a highly price-sensitive buyer of LNG and may switch to coal for power generation and fertilizer production if gas prices rise too much.

  • In February 2026, as part of a broader U.S.-India trade deal, New Delhi said it 'intends' to import more than $500 billion worth of U.S. energy, information and communication technology, coal, and other products.
  • Last month, even as U.S. Treasury Secretary Scott Bessent announced a 30-day waiver allowing Indian refiners to continue buying Russian oil, he said India was an 'essential partner of the United States' and that Washington expected New Delhi to ramp up purchases of U.S. crude.
  • On Thursday, Bessent said the U.S. will not be renewing the 'general license' on Russian or Iranian oil, and a previous waiver was meant only for sanctioned oil 'that was on the water prior to March 11th.'

The players

Sergio Gor

The U.S. Ambassador to India who met with India's Minister of Petroleum and Natural Gas to discuss 'energy security and unlocking new opportunities for accelerating growth.'

Hardeep Singh Puri

India's Minister of Petroleum and Natural Gas who met with the U.S. Ambassador to discuss energy cooperation.

Donald Trump

The former U.S. President who has repeatedly urged India to purchase more American energy, including Venezuelan oil supplied through Washington.

Scott Bessent

The U.S. Treasury Secretary who announced a 30-day waiver allowing Indian refiners to continue buying Russian oil, but also said India was an 'essential partner' and expected it to ramp up U.S. crude purchases.

Mukesh Sahdev

The chief oil analyst at energy intelligence firm XAnalysts who said the U.S. wants India to sign an energy deal sooner rather than later while it is in a 'stressful situation' scrambling to secure supplies.

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What they’re saying

“Expanding access to reliable American energy to India and supporting long-term energy security and diversity for both nations.”

— Sergio Gor, U.S. Ambassador to India

“India was an 'essential partner of the United States' and that Washington expected New Delhi to ramp up purchases of U.S. crude.”

— Scott Bessent, U.S. Treasury Secretary

What’s next

The U.S. is expected to continue pressing India to commit to significant energy purchases from American sources, even as India seeks to balance its energy security needs with the economic impacts of more expensive U.S. supplies.

The takeaway

The U.S. push to expand energy sales to India highlights the geopolitical tensions around global energy markets, as Washington seeks to leverage its energy resources to strengthen ties with a key strategic partner. However, India must carefully navigate these pressures to ensure its own energy security and economic stability.