India’s crude oil import bill could increase by USD 9 billion to USD 12 billion, if the country stops buying Russian crude oil, according to a report by the State Bank of India (SBI). The report noted that if India halted oil imports from Russia for the rest of FY26, the fuel bill might increase by USD 9 billion in FY26 and USD 11.7 billion in FY27 due to increase in prices.
SBI stated “if India stopped oil imports from Russia during the rest of FY26, then India’s fuel bill might increase by only USD 9 billion”. Russia currently accounts for 10 per cent of the global crude supply. If all countries stopped buying from Russia, crude oil prices could rise by around 10 per cent, provided no other countries increase their production.
India substantially increased purchasing of Russian oil since 2022, which was sold at a discount, capped at USD 60 per barrel, to ensure energy security after Western nations imposed sanctions on Moscow and avoided its supplies following the invasion of Ukraine.
As a result, Russia’s share in India’s total oil imports surged from just 1.7 per cent in FY20 to 35.1 per cent in FY25, making Russia India’s largest oil supplier. In volume terms, India imported 88 million metric tonnes (MMT) of crude from Russia in FY25, out of its total oil imports of 245 MMT.
Before the Ukraine war, Iraq was India’s top crude supplier, followed by Saudi Arabia and the United Arab Emirates (UAE). Indian refiners generally source oil from Middle Eastern producers through annual contracts, which allow flexibility to request additional supplies each month.
Since the imposition of sanctions on Russia, refiners have also turned to crude suppliers in the United States, West Africa, and Azerbaijan. India has further diversified its oil sources to about 40 countries. New supply options have emerged from Guyana, Brazil, and Canada, adding to the country’s energy security.
If Russian supplies were cut off, India could shift back to its traditional Middle Eastern suppliers under existing annual deals, ensuring flexibility in meeting its import needs. The SBI report highlighted that while the potential increase in the import bill is significant, India’s diversified supply network and established contracts with other oil-producing nations may help cushion the impact.
However, a rise in global crude prices due to reduced Russian exports would still put upward pressure on costs.
