India imported nearly $50 billion worth of oil in Q1 02/27/27, 40% of total oil import bill in FY26 | Today’s news

New Delhi: India’s oil import bill soared to nearly $50 billion in the June quarter, up 60% from a year earlier, as the war in West Asia ended discounts that had once cushioned the country’s energy costs.

Government data showed the world’s third-largest oil importer paid $49.8 billion for crude oil in the April-June period, even as the volume of oil it bought fell to around 60 million tonnes from 62.6 million tonnes a year ago. The difference between rising costs and falling volumes underscores how much of the increase is driven by price rather than demand.

Read also | How did oil prices behave during the war in West Asia?

Brent crude touched a five-week high of $90 a barrel on Monday, adding pressure to the import bill, which already accounts for 40% of India’s FY26 oil purchases. “Along with the rise in oil prices in general, the fact that most of the discounts that major buyers like India received before the war were also canceled for most of April-June,” said Madan Sabnavis, chief economist at Bank of Baroda.

The weakening rupee, which fell 14 paise to 96.44 against the dollar on Monday, added to the pressure, while a new threat emerged: Yemen’s Houthi militia said it would close the Bab el-Mandeb strait to Saudi Arabia, threatening the Red Sea route that India uses as an alternative to the dollar. Strait of Hormuz.

Russia is still dominant, but the discounts have shrunk

So far in July, Venezuela is the fourth largest oil supplier to India, exporting 342,819 barrels per day. Russia remains the largest supplier to India, exporting 2.6 million barrels, according to data from shipping and commodity tracking firm Kpler. In April-May, when major sources of supply dried up with the closure of the Strait of Hormuz, Russia charged a premium to sell oil compared to the discounts it had offered in the past four years. It is currently offering discounts, albeit a smaller amount, around $4 per barrel.

A weakening rupee also contributed to the widening import bill. On Monday, the rupee weakened 14 paise to 96.44 against the US dollar on risk aversion in global markets and a sharp rise in oil prices.

Read also | India is bracing for energy market volatility as the US-Iran war escalates

As oil prices continue their upward trend, import costs are expected to rise in the coming months. Prices fell after the signing of the Memorandum of Understanding (MoU), however prices returned to a northerly trajectory after the renewed war between Iran and the US and Israel.

Sabnavis said that while prices may not cross the $90 per barrel mark, they are expected to average around $75-85 this fiscal, still higher than prices in the same period last fiscal.

The Indian crude basket, which represents the price of oil purchased by Indian refiners, was at $83.06 a barrel on Friday.

Houthi militias target Saudi supply route

In a major development that may further limit global oil supplies, Yemen’s Houthi militia has announced the closure of the Bab el-Mandeb Strait to Saudi Arabia.

The move is expected to affect oil supplies from Saudi Arabia via the Red Sea. Mint earlier announced that India was importing oil from Saudi Arabia’s Yanbu port on the Red Sea as an alternative to the Strait of Hormuz.

The supply disruption and possible increase in oil prices have a big impact on India as it imports about 90% of its total oil needs. An increase of $1 per barrel can lead to an increase ₹18,000 crore in the country’s total import bill.

Read also | India eyes UAE ports to bypass Hormuz risks for energy costs

C. Uday Bhaskar, director of the Society for Policy Studies, said: “Every dollar increase in the average annual oil price adds $1.5-2 billion to India’s annual oil import bill. If this oil increase continues for a longer period, the adverse impact on the trade deficit and CAD (current account deficit) will also be felt.”

“India will have to develop a deft policy that combines diplomacy with market vigilance and long-term partnerships with other oil producers. Many calls and warnings that Delhi will have to reassess its major power relationships, especially with the Trump-led US,” he added.

Last week, data released by the Ministry of Statistics and Program Implementation showed that India’s retail inflation outpaced India’s The Reserve Bank of India’s central target is for the first time since January 2025 and accelerated to 4.38% in June.