Archive · 29 Sep 2026
Why India’s Physical Oil Basket Costs More Than Futures
India buys real shipments of oil, while futures prices are for oil delivered later.
Real shipments can cost more when supplies are tight.
India’s oil basket was about $120.80 per barrel, compared with Brent futures near $105.
The basket includes mostly Brent Dated crude and some Oman-Dubai crude.
Higher shipping and insurance costs are adding to the price.
Problems near the Strait of Hormuz and Saudi Arabia’s oil pipeline are also creating concern.
Russian oil has become less discounted and sometimes costs more than before.
Analysts say stronger festive-season demand could push prices higher.
In a very serious disruption, the basket could briefly reach $150-$160 per barrel.
India’s crude basket reached about $120.80 per barrel in September, while Brent futures traded near $105.
The Indian basket reflects physical crude imports, whereas futures prices reflect crude scheduled for delivery in a later month.
September’s basket comprised 77.81% Brent Dated crude and 22.19% Oman-Dubai crude.
Freight, insurance, Middle East supply risks, pipeline disruptions and reduced Russian discounts are lifting physical crude costs.
Analysts say the basket could remain between $115 and $130, with severe disruptions potentially pushing it to $150-$160.
- Who
- India, its oil refiners and commodity analysts Anindya Banerjee and Hareesh V.
- What
- The Indian Crude Basket has risen above $120 per barrel and is trading well above nearby international crude futures.
- When
- In September, with risks expected to continue through the October-December festive period.
- Where
- India’s physical crude market, supplied through international routes including the Middle East and the Strait of Hormuz.
- Why
- Supply disruptions, higher freight and insurance costs, reduced Russian discounts, geopolitical uncertainty and potentially stronger seasonal demand are raising physical crude prices.
- Indian Crude Basket
- Quoted at about $120.80 per barrel; September’s average has been around $115-$120.
- Brent futures
- November Brent futures were trading above $105 per barrel.
- September crude mix
- 77.81% Brent Dated crude and 22.19% Oman-Dubai crude.
- Freight cost
- A supertanker cargo to Asia is estimated to incur about $18 per barrel in freight.
- Recent increase
- The basket rose from about $83 in July and $90 in August to above $120 in September.
- Base-case outlook
- Analyst projections place the basket broadly in the $115-$130 range if disruptions ease.
- Severe-case outlook
- Extended pipeline and Hormuz disruptions could temporarily push the basket to $150-$160.