Archive · 9 Aug 2026
India Can Manage Losing Russian Oil; $100 Crude Bigger Risk
India buys a lot of oil from other countries to run cars, trucks, planes, and factories.
Some of that oil comes from Russia, which sometimes sells it at a lower price.
Because of a war between Russia and Ukraine, Russia started giving India a big discount, sometimes saving USD 15 to USD 20 on every barrel.
That discount is now much smaller, only about USD 2 to USD 3 per barrel.
India spends nearly USD 150 billion every year on oil, but the money saved from the Russian discount is only about USD 2 to USD 3 billion.
So if India stops buying Russian oil, it could probably find oil from other places without too much trouble.
The bigger problem would be if oil gets very expensive everywhere, like USD 100 per barrel.
When oil prices go up by USD 10, India's oil bill grows by about USD 15 billion.
That could make things in shops cost more and make the rupee weaker.
So experts say losing the Russian discount is okay, but a big oil price increase would be much harder for India.
India could withstand losing discounted Russian oil more comfortably than a prolonged surge in global crude prices to USD 100 a barrel.
The discount on Russian crude has narrowed from USD 15-USD 20 per barrel to about USD 2-USD 3 per barrel.
India spends nearly USD 150 billion annually on crude imports, while the benefit from discounted Russian supplies is only USD 2-USD 3 billion a year.
India sources crude from more than 40 countries and holds strategic petroleum reserves and commercial inventories as a buffer.
Every USD 10 increase in the average price of India's crude import basket could add about USD 15 billion to its annual oil import bill.
- Who
- Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, whose assessment was quoted by ANI, concerning India's oil imports.
- What
- An assessment that India could manage the loss of discounted Russian oil, but a sustained rise in crude prices to USD 100 a barrel would sharply increase its import bill.
- When
- Not specified in the articles.
- Where
- India; the assessment was reported from New Delhi.
- Why
- Because losing the relatively small Russian discount would add little to India's costs, while high global crude prices would significantly raise import costs, widen the trade deficit, weaken the rupee, and increase inflation.
- Annual crude import spending
- Nearly USD 150 billion
- Annual benefit from Russian discount
- USD 2-USD 3 billion
- Current Russian crude discount
- USD 2-USD 3 per barrel
- Peak Russian crude discount
- USD 15-USD 20 per barrel
- Cost of USD 10 price increase
- About USD 15 billion added to annual import bill
- Crude supplier countries
- More than 40, including Middle East, Africa and the US
- Assessment source
- Anindya Banerjee, Kotak Securities, quoted by ANI
- Risks of USD 100 crude
- Wider trade deficit, weaker rupee, higher inflation