1 week ago
India Faces $22.5 Billion Fossil Fuel Import Shock
A conflict involving Iran made it harder and more expensive to move energy around the world.
Countries had to pay more for oil, gas and fuels than they expected before the conflict.
India paid about $22.5 billion extra between March and August 2026.
Only China paid more among the countries studied.
Diesel, gasoline, liquefied natural gas and jet fuel all became more expensive.
This was especially difficult for poorer countries because energy costs took up a larger share of their economies.
Countries that had built more clean-energy capacity needed to buy less fossil fuel.
They saved about $36 billion during the first five months of the crisis.
The figures are estimates, and some August shipping data was modeled.
India paid an estimated $22.5 billion in additional fossil-fuel import costs between March and August 2026, ranking second behind China’s $35.5 billion.
The energy shock followed United States and Israeli strikes on Iran on February 28, which disrupted shipping and raised oil and gas prices.
Globally, the crisis added more than $330 billion to fossil-fuel import bills across 170 countries, according to the Centre for Research on Energy and Clean Air.
Crude oil accounted for $164 billion of the additional global cost, while diesel, gasoline, liquefied natural gas and jet fuel also recorded sharp price increases.
Countries that expanded clean-power capacity since 2020 avoided an estimated $36 billion in fossil-fuel imports during the first five months of the crisis.
- Who
- India was the second-highest additional-cost country among the major fossil-fuel importers studied; China ranked first.
- What
- A Centre for Research on Energy and Clean Air analysis found that the energy shock increased India’s fossil-fuel import bill by an estimated $22.5 billion.
- Where
- The shock affected global seaborne oil, refined-fuel and gas markets, particularly around the Strait of Hormuz.
- When
- The additional costs were measured from March through August 2026, following strikes on February 28.
- Why
- The strikes and resulting disruption to shipping and energy markets pushed fossil-fuel prices above levels expected before the conflict.
Clean-energy resilience
Fossil-fuel dependence
Protection from price shocks
Clean-energy resilience
The analysis says countries that added clean-power capacity and reduced fossil-fuel demand avoided billions of dollars in imports during the crisis.
Fossil-fuel dependence
Countries dependent on imported oil and gas remained exposed to higher international prices and disruption to shipping routes.
Economic burden
Clean-energy resilience
Greater use of domestic clean power can reduce the amount of coal, gas and oil that countries must purchase when prices surge.
Fossil-fuel dependence
Poorer and lower-middle-income countries faced a heavier burden because their additional fossil-fuel costs equaled about 1% of 2024 gross domestic product, compared with 0.45% for high-income countries.
Key facts
- India’s additional cost
- An estimated $22.5 billion between March and August 2026; another source states the figure as $22 billion.
- Highest additional cost
- China recorded $35.5 billion, followed by India and the United States at $16.5 billion.
- Global additional bill
- More than $330 billion over six months, or about $55 billion per month.
- Countries covered
- The analysis examined 170 countries and compared actual import prices with futures prices before the strikes.
- Crude oil impact
- Crude accounted for $164 billion of the additional global import cost, with prices averaging 35% above pre-strike expectations.
- Fuel increases
- Diesel and gasoil rose 59%, gasoline 43%, liquefied natural gas 60% in the Atlantic basin and 75% in the Pacific, and jet fuel 59%.
- Clean-energy savings
- Clean-power capacity added since 2020 helped countries avoid an estimated $36 billion in fossil-fuel imports during the first five months.
Quotes
Luke Wickenden
Energy Analyst at CREA
“The best way to protect against high oil prices is to get off the black stuff as quickly as possible.”
businesstoday.in
Sources
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