2 hrs ago
Brent Crude Tops $95, Raising India’s Oil Import Concerns
Oil prices have risen above USD 95 because fighting in West Asia may disrupt supplies.
India buys nearly 90 percent of the oil it uses from other countries.
This means costlier oil could make India’s import bill much larger.
It could also raise prices for people and businesses.
Higher costs may slow economic growth and widen India’s current account deficit.
The Strait of Hormuz closure has made some oil shipments more difficult.
India is buying oil from countries such as Russia, the United States and Venezuela.
Oil demand in India is also increasing, especially for petrol and diesel.
The country is trying to find more suppliers and produce more oil at home.
Brent crude rose above USD 95 a barrel as renewed West Asia fighting heightened supply-disruption fears.
India imports nearly 90 percent of its crude, leaving it exposed to higher global oil prices.
Every USD 1 rise in crude prices sustained for a year could add about Rs 18,000 crore to India’s annual import bill.
The Strait of Hormuz’s closure has sharply reduced traditional West Asian oil flows to India.
India is seeking more suppliers and investing in offshore exploration to improve energy security.
- Who
- India, its oil importers and refiners, and oil-producing and exporting countries are affected.
- What
- Brent crude crossed USD 95 a barrel, increasing concerns about India’s import costs and energy security.
- Where
- The disruption is centered in West Asia, including the Strait of Hormuz, while the economic impact is expected in India.
- When
- Prices rose after fighting escalated following US strikes on 31 August and retaliatory Iranian attacks.
- Why
- Renewed fighting has raised fears of supply disruptions, while India remains highly dependent on imported crude and demand continues to grow.
Key facts
- Brent crude price
- Above USD 95 a barrel
- India’s import dependence
- Nearly 90 percent of crude requirements
- FY26 oil import bill
- Around USD 123 billion
- Estimated annual impact
- Each USD 1 increase in crude sustained for a year could add about Rs 18,000 crore to the annual bill
- FY27 imports
- India imported USD 63.4 billion of crude in the first four months, about 56.5 percent more than a year earlier
- Demand growth
- August petrol consumption rose 7.88 percent year-on-year and diesel demand rose 6.46 percent
- Domestic exploration plan
- The Rs 84,000-crore Samudra Manthan offshore exploration scheme aims to increase domestic production
Sources
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