India imports crude oil worth nearly $50 bn in Q1FY27, 40% of FY26 total crude import bill
New Delhi: India's crude oil import bill surged to nearly $50 billion in the June quarter, a 60% jump from a year earlier, as the
New Delhi: India's crude oil import bill surged to nearly $50 billion in the June quarter, a 60% jump from a year earlier, as the war in West Asia ended discounts that once cushioned the country's energy costs. The world's third-largest oil importer paid $49.8 billion for crude in the April-June period, government data showed, even as the volume of oil bought fell to around 60 million tonnes from 62.6 million tonnes a year ago. The gap between rising costs and falling volumes underscores how much of the increase is being driven by price rather than demand. Also Read | How have crude oil prices behaved during the West Asia war? Brent crude touched a five-week high of $90 per barrel on Monday, adding pressure on an import bill that already represents 40% of India's FY26 oil purchases. "Along with increase in oil prices in general, the fact that most of the discounts that major buyers like India were getting prior to the war were also done away with during most of April-June," said Madan Sabnavis, chief economist at Bank of Baroda.
A weakening rupee, down 14 paise to 96.44 against the dollar on Monday, is compounding the pressure, while a new threat has emerged: Yemen's Houthi militia said it would close the Bab el-Mandeb Strait to Saudi Arabia, jeopardizing a Red Sea route India has been using as an alternative to the Strait of Hormuz. Russia still dominant, but discounts have shrunk So far in July, Venezuela is the fourth largest supplier of oil to India with 342,819 barrels per day of oil exports. Russia continues to be the largest supplier to India, with exports of 2.6 million barrels, according to data from the maritime and commodities-tracking firm Kpler. In April-May, as major supply sources dried up with the closure of the Strait of Hormuz, Russia charged a premium on oil sales, compared to the discounts it had been offering in the past four years. Currently, it is offering discounts, though of a smaller amount, around $4 per barrel. The weakening of the rupee also added to the widening import bill. On Monday, the rupee depreciated 14 paise to 96.44 against the US dollar, on risk aversion in global markets and a surge in crude oil prices.
Also Read | India braces for energy market volatility as US-Iran war escalates As crude prices continue their upward trend, the import bill is expected to increase in the months ahead. Prices had eased after the signing of the memorandum of understanding (MoU), however, after the resumption of the war between Iran, and the US and Israel, the prices have returned to the northward trajectory. Sabnavis said that although prices may not cross the $ 90-per-barrel mark, they are expected to average around $75-85 this fiscal, which is still higher than prices in the same period last fiscal. The Indian crude oil basket, which represents the cost of crude procured by Indian refiners, was at $83.06 per barrel on Friday. Houthi militia targets Saudi supply route In a major development which may further squeeze global oil supplies, Yemen's Houthi militia announced the closure of the Bab el-Mandeb Strait to Saudi Arabia. This move is set to affect oil supplies from Saudi Arabia via the Red Sea. Mint earlier reported that India has been importing oil from Yanbu Port in Saudi Arabia on the Red Sea as an alternative to the Strait of Hormuz.
The BriefWire