NEW DELHI: Washington’s aggressive push to make its allies purchase American oil, despite being a net importer itself, is raising alarms over a potential global energy crunch, according to a Global Trade Research Initiative (GTRI) report released on Sunday.
World Bank data shows that in 2024, the US exported $298 billion in petroleum while importing $246 billion. In crude alone, it ran a $60 billion deficit, highlighting that the country is far from self-sufficient.
Yet under President Donald Trump, energy has become a tool of trade diplomacy, with countries pressured into long-term purchases of US crude, refined products, and liquefied natural gas (LNG).
Mint reported on 25 September that the US has asked India to commit, possibly in writing, to trimming its Russian oil imports and boosting purchases of American crude before a trade deal can be finalized.
According to GTRI, most US crude exports consist of light shale oil that domestic refineries cannot fully process, as they are optimized for heavier grades from Venezuela, Mexico, and West Asia. Importers, including India, would need costly upgrades to their refineries to use these barrels efficiently. Washington is also insisting that buyers avoid Russian oil, which still accounts for over 10% of global supply.
Ajay Srivastava, founder of GTRI, warned that the combination of political pressure and physical limitations risks creating a volatile global energy market.
The European Union (EU), Japan, Thailand, and other nations have been drawn into long-term commitments. The EU has pledged $750 billion worth of American energy over three years, Japan $7 billion annually, and Thailand a 20-year LNG deal, the report stated.
Smaller agreements with Vietnam and Britain similarly lock allies into decades-long dependence. Britain will import 50,000 MMBtu of US gas daily from 2028, roughly five LNG cargoes annually. Vietnam plans to import nine million tonnes per annum (mtpa) of US LNG by 2030, while Thailand’s 20-year contract covers 2 mtpa.
While framed as commercial transactions, Srivastava argues they are as much about political leverage as energy security.
“The US is using energy as a bargaining chip, but the supply reality doesn’t match the political ambitions,” he said. “Shale oil production is highly fragile; wells lose 60-70% of output in the first year. Forcing countries to invest in infrastructure for a supply that could fluctuate dramatically is a risky strategy.”
The US shale boom, which transformed global energy markets over the past decade, remains volatile. Profitability requires oil prices above $55 per barrel, meaning production can slow rapidly if market conditions tighten.
Brent crude currently hovers at $66.80, supporting exports, but any price drop or financial strain could curb output, leaving global buyers exposed.
“If prices fall or financing tightens, drilling will slow and output will contract — jeopardizing America’s export ambitions. Building global energy security atop such a volatile base, experts warn, is a gamble with high systemic risk,” the GTRI report said.
India has pursued a diversified oil sourcing strategy. In 2024, it imported $52.7 billion worth of crude from Russia, representing 37% of total oil imports, with Iraq, Saudi Arabia, the United Arab Emirates, Nigeria, and the US supplying the remainder.
Imports from the US totalled $7.7 billion, including crude, refined products, and LNG, leaving a trade deficit of $3.2 billion in the sector. Indian refiners note that Russian crude is cheaper and technically compatible with existing infrastructure, while an exclusive shift to US shale would raise costs and disrupt operations.
Beyond oil, the US has used other levers to extract concessions from India: 50% tariffs on certain exports, a hundredfold increase in H-1B visa fees to $100,000, sanctions on Chabahar port, and legal scrutiny of India’s oil trade with Russia. Observers see these measures as coordinated pressure to align New Delhi with Washington’s broader geopolitical agenda.
The GTRI cautions that Washington’s “drill, export, and punish” model carries systemic risks. “No country can ensure energy stability by weaponizing supply. True security depends on diversified sourcing, flexible trade arrangements, and respect for national decisions,” the report said.