India could face $12 bn jump in oil bill if Russian crude imports stop: SBI report

India’s crude oil import bill could swell by as much as $12 billion if the country halts its purchase of Russian crude, according to a report by the State Bank of India (SBI). The report estimates that stopping Russian oil imports for the rest of FY26 could increase the fuel bill by $9 billion this year and $11.7 billion in FY27, largely due to higher global prices.

India — the world’s third-largest oil importer — has a refining capacity of about 5.2 million barrels per day, including 1.24 million barrels per day from its massive Jamnagar facility alone. The International Energy Agency projects the country’s demand will rise by another 1 million barrels per day by 2030.

India’s oil mix

Russia accounts for roughly 10% of the world’s crude oil supply. If all countries were to stop buying Russian oil, SBI estimates crude prices could climb around 10%, assuming no other producers step in to fill the gap.

India began buying heavily discounted Russian crude — capped at $60 per barrel — in 2022, after Western sanctions on Moscow over the Ukraine invasion forced many nations to shun its oil. The strategy was aimed at ensuring energy security while keeping costs down.

As a result, Russia’s share of India’s oil imports soared from 1.7% in FY20 to 35.1% in FY25, making it India’s single largest supplier. In FY25 alone, India imported 88 million metric tonnes (MMT) of crude from Russia out of a total of 245 MMT.

Shifts in supply sources

Before the Ukraine war, Iraq was India’s top supplier, followed by Saudi Arabia and the UAE. Indian refiners maintain long-term contracts with Middle Eastern producers, allowing them to increase supply volumes when required.

Since sanctions on Russia, India has also tapped alternative sources including the United States, West Africa, and Azerbaijan. More recently, supply lines have opened from Guyana, Brazil, and Canada, broadening the country’s supplier base to about 40 nations.

Impact and mitigation

If Russian supplies were disrupted, India could revert to Middle Eastern producers under existing agreements, leveraging the flexibility of those deals to bridge the shortfall.

However, SBI notes that even with diversified sourcing, a drop in Russian exports would likely lift global crude prices, putting upward pressure on India’s import costs.

The report underscores that while India’s oil network is resilient, the loss of discounted Russian crude would still deliver a sizable blow to the import bill — a potential USD 12 billion setback that could ripple through the economy in the form of higher fuel costs.