The oil import bill of India could significantly increase to USD 12 billion if the country stops buying Russian crude oil, according to a report by the State Bank of India (SBI). According to the report, if the government stops oil imports from Russia for the rest of the financial year 2025-26, the fuel bill is expected to surge by USD 9 billion in FY26 and USD 11.7 billion in FY27 due to an 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"
Explosion in global crude prices
Crude oil prices could rise by up to 10 per cent if all countries stopped buying from Russia, provided no other countries increase their production.
India substantially increased the purchase of Russian oil since 2022 to ensure energy security after Western nations imposed sanctions on Moscow following its invasion of Ukraine. Russia was selling crude at a discount and had capped it at USD 60 per barrel.
In FY20, Russia's share in India’s total oil imports was just 1.7 per cent. This has increased 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).
India diversified its oil sources
India has not just increased its purchases from Russia but has also 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.
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.
