Washington’s intensified drive to expand American oil sales to allies is raising concerns over long-term energy stability, according to a report from the Global Trade Research Initiative (GTRI) released Sunday.
World Bank data shows that in 2024, the United States exported $298 billion worth of petroleum while importing $246 billion. Despite this trade surplus, the U.S. ran a $60 billion deficit in crude oil, underlining its dependence on foreign supplies and challenging claims of self-sufficiency.
Under President Donald Trump, energy has been deployed as a tool of trade diplomacy. Countries have been pressed to sign long-term agreements for U.S. crude, refined products, and liquefied natural gas (LNG). On 25 September, Mint reported that Washington asked India to formally commit to reducing Russian oil imports and increasing purchases of American crude as a condition for concluding a trade deal.
Shale Oil Constraints
GTRI noted that most U.S. crude exports are light shale oil, which domestic refineries cannot fully process since they are designed for heavier grades from regions such as Venezuela, Mexico, and West Asia. Importing nations, including India, would face costly refinery upgrades to handle these barrels efficiently. At the same time, Washington continues to pressure buyers to avoid Russian supplies, which still account for more than 10% of global output.
Ajay Srivastava, founder of GTRI, warned that combining political pressure with physical supply limitations risks fueling volatility in global energy markets. “The U.S. 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.”
Long-Term Dependence
The report highlights multiple agreements binding allies to U.S. energy supplies. The European Union has pledged $750 billion of American energy purchases over three years, Japan $7 billion annually, and Thailand a 20-year LNG deal covering 2 million tons per annum (mtpa). Britain has committed to importing 50,000 MMBtu of U.S. gas daily from 2028, while Vietnam plans to import 9 mtpa of LNG by 2030.
Though framed as commercial contracts, Srivastava stressed these are deeply political, giving Washington significant leverage over allied economies.
Fragile Export Base
The shale boom that reshaped global energy markets remains unstable. Production profitability requires oil prices above $55 per barrel, meaning any price drop or financing squeeze could rapidly curb output. Brent crude is currently trading at $66.80, but GTRI warned that volatility makes American supply an unreliable foundation for global energy security.
“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 is a gamble with high systemic risk,” the report stated.
India’s Balancing Act
India has pursued a diversified strategy. In 2024, it imported $52.7 billion of crude from Russia, accounting for 37% of total oil imports. Other major suppliers included Iraq, Saudi Arabia, the United Arab Emirates, Nigeria, and the U.S. Imports from the U.S. totalled $7.7 billion, leaving India with a $3.2 billion trade deficit in the petroleum sector.
Indian refiners maintain that Russian crude is both cheaper and more compatible with existing infrastructure. A forced pivot toward American shale, they argue, would increase costs and disrupt operations.
Beyond energy, Washington has used other policy tools to exert pressure on New Delhi, including imposing 50% tariffs on selected exports, dramatically increasing H-1B visa fees to $100,000, sanctioning the Chabahar port project, and closely scrutinizing India’s oil trade with Russia.
Warning of Systemic Risk
The GTRI cautioned that Washington’s “drill, export, and punish” model risks destabilizing global markets. “No country can ensure energy stability by weaponizing supply. True security depends on diversified sourcing, flexible trade arrangements, and respect for national decisions.”
TRADE TECH | India May Relax E-Commerce FDI Rules to Boost MSME Export Growth
