An SBI report states that if India stops importing crude oil from Russia, the country's expenditure could increase by up to $9 billion in the current financial year. This will also affect oil prices.
Russia Oil Import: India has been strengthening its energy security in recent years by purchasing crude oil from Russia at discounted rates. However, if international pressure, especially from the US, forces India to halt oil imports from Russia, the economic consequences could be profound. A report by the State Bank of India (SBI) warns that this could lead to an additional expenditure of $9 billion for India in the current financial year.
How Much Will Expenses Increase If Russian Oil Stops?
According to the SBI report, if India stops buying crude oil from Russia for the remainder of fiscal year 2026, its fuel bill could increase by up to $9 billion. In the next financial year, 2027, this increase could further rise to $11.7 billion. The primary reason for this is that India would then have to purchase oil from other countries at higher prices.
Russia's Role in the Global Crude Market
Russia accounts for approximately 10 percent of the total global crude oil supply. If countries around the world stop buying oil from Russia and no other country increases production, oil prices could rise by about 10 percent. This would put significant pressure on import-dependent countries like India.
Expansion of India-Russia Oil Trade
In 2022, when the Ukraine war began, Western countries imposed strict sanctions on Russia. It was at this time that India started buying crude oil from Russia at discounted rates. At that time, Russia sold oil to India at a rate of $60 per barrel. This benefited India and reduced the oil import bill. As a result, in fiscal year 2020, Russia's share in India's total oil imports was only 1.7 percent, while in fiscal year 2025, it increased to 35.1 percent.
Russia Becomes India's Largest Oil Supplier
In fiscal year 2025, India imported 88 million metric tons of crude oil from Russia. This was a significant portion of India's total oil imports of 245 million metric tons. It is clear that Russia has now become India's largest crude oil supplier.
Who Was the Largest Oil Supplier Before?
Before the Ukraine war, Iraq was India's largest oil supplier. It was followed by Saudi Arabia and then the United Arab Emirates (UAE). India has been buying oil from these countries through annual contracts, which also include the option of additional monthly supplies.
India Has Several Options for Oil Supply
Due to sanctions on Russia, India has turned to countries such as the United States, West Africa, and Azerbaijan. In addition, India has now started importing oil from almost 40 countries. This includes new countries such as Guyana, Brazil, and Canada. The aim is to strengthen energy security and reduce supply risks.
