India’s dependence on Russian crude set to rise after a steep drop in August
A bigger risk for India is not only the physical availability of crude, but the rising landed cost. Higher crude prices, freight, insurance, and longer voyages all increase the delivered cost of barrels
- Sep 15, 2026,
- Updated Sep 15, 2026 11:40 AM IST
The closure of the Saudi East-West Pipeline is likely to make India go for further diversification of crude, with Russian crude becoming very important to meet the country’s demand, after a 26% drop in August, according to experts.
India’s oil imports from Russia fell 26% in August from July’s record highs, according to provisional tanker data. The drop was due to US tariff pressure, Ukrainian drone strikes and growing competition from China. Russia remained India’s largest supplier, but the decline opened room for alternative sources including Venezuela, Brazil, the United Arab Emirates, Iraq, Angola and Nigeria.
Crude Oil Indian Basket as of 14.09.2026 is $128.70 per barrel, according to the Petroleum Planning & Analysis Cell. It breached $100 per barrel last week, the highest since July this year.
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Sumit Ritolia, Senior Manager, modelling, Kpler, a maritime intelligence firm, says India will likely lean even more on diversification across Russia, the US, West Africa, Latin America, and other non-Middle East sources to reduce exposure to any single corridor.
“Russian crude remains particularly important. With multiple chokepoints facing disruption, Russian barrels routed through the Black Sea and Baltic become more valuable from a supply-security perspective,” he says.
Diversification can reduce supply disruption risk, but it cannot fully offset the cost impact when several major oil routes are stressed at the same time.
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High crude prices
The closure of the Saudi East–West Pipeline further reduces routing flexibility for Indian refiners at a time when several key oil transit routes are already under pressure.
Saudi Arabia has shut down a major oil pipeline after a drone attack last week, while Yemen’s Houthi rebels have seized a strategically vital island guarding the entrance to the Red Sea.
The bigger risk for India is not only the physical availability of crude, but the rising landed cost. Higher crude prices, freight, insurance and longer voyages all increase the delivered cost of barrels.
“For India, that means a higher oil import bill, more pressure on the current account and rupee, and a greater inflationary risk if elevated energy costs persist. There is also a potential impact on OMC margins and the government's fiscal position if domestic fuel prices are not allowed to fully reflect the increase in international crude and freight costs,” he explains.
The closure of the Saudi East-West Pipeline is likely to make India go for further diversification of crude, with Russian crude becoming very important to meet the country’s demand, after a 26% drop in August, according to experts.
India’s oil imports from Russia fell 26% in August from July’s record highs, according to provisional tanker data. The drop was due to US tariff pressure, Ukrainian drone strikes and growing competition from China. Russia remained India’s largest supplier, but the decline opened room for alternative sources including Venezuela, Brazil, the United Arab Emirates, Iraq, Angola and Nigeria.
Crude Oil Indian Basket as of 14.09.2026 is $128.70 per barrel, according to the Petroleum Planning & Analysis Cell. It breached $100 per barrel last week, the highest since July this year.
MUST READ | Houthis attack Saudi Arabia airbase as Hormuz talk stalls; oil climbs to nearly $107
Sumit Ritolia, Senior Manager, modelling, Kpler, a maritime intelligence firm, says India will likely lean even more on diversification across Russia, the US, West Africa, Latin America, and other non-Middle East sources to reduce exposure to any single corridor.
“Russian crude remains particularly important. With multiple chokepoints facing disruption, Russian barrels routed through the Black Sea and Baltic become more valuable from a supply-security perspective,” he says.
Diversification can reduce supply disruption risk, but it cannot fully offset the cost impact when several major oil routes are stressed at the same time.
DON'T MISS | Inflation heats up: Food prices rise, crude crosses $100; what it means for your wallet
High crude prices
The closure of the Saudi East–West Pipeline further reduces routing flexibility for Indian refiners at a time when several key oil transit routes are already under pressure.
Saudi Arabia has shut down a major oil pipeline after a drone attack last week, while Yemen’s Houthi rebels have seized a strategically vital island guarding the entrance to the Red Sea.
The bigger risk for India is not only the physical availability of crude, but the rising landed cost. Higher crude prices, freight, insurance and longer voyages all increase the delivered cost of barrels.
“For India, that means a higher oil import bill, more pressure on the current account and rupee, and a greater inflationary risk if elevated energy costs persist. There is also a potential impact on OMC margins and the government's fiscal position if domestic fuel prices are not allowed to fully reflect the increase in international crude and freight costs,” he explains.