Synopsis

India's crude oil import bill rose significantly in early 2026-27. Higher global oil prices and supply disruptions increased costs for refiners. Russia remained India's largest crude oil supplier during this period. The nation imports most of its annual crude oil consumption. This dependence makes India vulnerable to global price fluctuations.

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India's crude oil import bill rises 26% to $49 billion in Q1 FY27 despite 18% fall in volumes

India's crude oil import bill rose 26% year-on-year to $49 billion in the first quarter of 2026-27, even as crude import volumes fell 18%, as the West Asia conflict disrupted supplies and pushed global oil prices higher.

According to Commerce Ministry data, India imported 59.7 million tonnes (MT) of crude oil between April and June, compared with 73 MT in the same period last fiscal. Despite the lower volumes, the import bill increased from $39 billion in April-June 2025 to $49 billion this year.

India, the world's third-largest crude oil importer, meets around 88% of its annual consumption through imports, leaving its economy highly exposed to global oil prices and currency movements.

Crude prices, which were below $70 per barrel before the US-Iran conflict erupted in February, surged after disruptions to shipments through the Strait of Hormuz, a key route for global oil supplies. The strait accounts for around a fifth of global oil transit, while roughly 40% of India's crude imports came through the route from West Asian suppliers.

Brent crude touched nearly $120 a barrel at the peak of the conflict. The weakening rupee also added to the cost of India's oil imports.

India imports around 1.8-2 billion barrels of crude a year, meaning every $1 increase in the price of a barrel can add roughly $2 billion to the country's annual oil import bill.

The cost of crude also varied across suppliers due to differences in freight, insurance and war-risk premiums.

Russia, India's largest crude supplier during the quarter, supplied oil at an average cost of $2,408 per tonne, while crude from the UAE cost an average $2,213 per tonne.

"Our priority at that time was to secure supplies from wherever possible to ensure energy security for 1.4 billion people," an executive at a state-run refining company told The Times of India.

The executive added that discounts available on crude before the conflict had disappeared, while refiners were forced to pay higher war-risk premiums.

Russia remains India's biggest crude oil supplier

Russia accounted for more than 40% of India's crude imports in the first quarter of FY27, retaining its position as the country's largest supplier.

The UAE was the second-largest supplier, accounting for 14.6% of imports, followed by Saudi Arabia at 9.9%, Venezuela at 5.2% and Oman at 4.5%.

The shift in crude prices and higher risk premiums during the quarter underline the vulnerability of India's oil import bill to geopolitical disruptions, particularly given the country's heavy dependence on overseas crude.

(With inputs from TOI)