According to an Indian (SBI) state bank report, the Indian Act on Oil Imports could significantly increase.
If India stops importing oil from Russia for the rest of FY26, the fuel account could increase by $ 9 billion in FY26 and $ 11.7 billion in FY27 due to an increase in prices, she also reported with the citation of the SBI study.
This report comes in the middle of the US, which stores another 25% tariff on all Indian goods and sanctions for purchases of India from Russia. US President Donald Trump said that there would be no business with India until the dispute over tariffs has been resolved.
The White House on Wednesday issued an executive order that deposited another 25 percentage points in the tarifts on Indian goods, thus increasing the total fee to 50%. Trump’s administration quoted concerns about national security and foreign policy and showed specifically on the continuous import of Russian oil in India.
The role of Russian oil in imports of India
Indian dependence on Russian oil has grown since 2022. The Russian share in the total import of oil in India increased from only 1.7 % in FY20 to 35.1 % in FY25, making Russia its largest oil supplier.
This shift was largely driven by the availability of discounted Russian oil, limited to $ 60 per barrel, step towards ensuring energy security after the Western nations imposed sanctions on Moscow and avoided its stocks after the invasion of Ukraine.
Also read | American tariffs: Indian state oil refinery will be downloaded back from the purchase of Russian oil
India imported 88 million metric tons (MMT) raw from Russia in FY25, from its total import of oil 245 MMT, the report said.
Before the war in Ukraine, Iraq was the best Indian brutal supplier, followed by Saudi Arabia and the United Arab Emirates (United Arab Emirates).
The impact of the joining of Russian oil imports
“If India stops importing oil from Russia for the rest of FY26, then the Indian fuel account could increase by only $ 9 billion,” SBI said in the report.
This would be a direct consequence that he would have to buy more expensive oil from other countries. In addition, if all countries should stop buying Russian oil, which represents 10 % of the world’s raw offer, oil prices could increase by up to 10 % if no other countries increase their production.
Indian strategy to mitigate the impact
Despite the potential increase in import Act, the SBI report emphasized that the Indian diversified supply network and the established contracts with other oil producing nations can help the cushions of the impact.
India diversified her oil sources into about 40 countries, including new suppliers such as Guyana, Brazil and Canada, which contributes to the country’s energy security.
Also read | Trump doubles: a total of 50% tariff deposited in India over Russian oil trade
In addition, Indian refiners have annual contracts with their traditional Middle East producers, which allow flexibility to require additional deliveries every month, nor reported.
Since the imposition of sanctions against Russia, refiner also turned to raw suppliers in the United States, Western Africa and Azerbaijan.
Also read | Oil heads for the worst run since 2021 when traders compromise US curbs
However, SBI warns that the increase in global oil prices would still exert pressure on the cost of fuel in India.
(Tagstotranslate) India
