New Delhi: India’s crude oil import bill witnessed a sharp surge during the first quarter of the current financial year, highlighting the country’s continued vulnerability to global energy market disruptions. According to provisional data released by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas, India’s crude oil import bill jumped by more than 60% YoY in the April-June quarter, even as the volume of crude oil imports declined slightly.
The sharp increase has been primarily attributed to rising international crude oil prices driven by renewed geopolitical tensions in West Asia and supply concerns surrounding the Strait of Hormuz, one of the world’s most critical energy shipping routes.
The latest data underscores the significant impact that instability in the Gulf region can have on India, which imports more than 88% of its crude oil requirements and nearly half of its natural gas consumption in the form of liquefied natural gas (LNG). A substantial portion of these imports passes through the Strait of Hormuz, making the country particularly exposed to disruptions in the region.
Crude oil import bill rises despite lower volumes
According to PPAC’s provisional figures, India’s crude oil import bill increased by 61.2% YoY to $49.8 billion during the April-June quarter. However, the total volume of crude oil imported fell by 4.5% to 59.8 million tonnes, equivalent to approximately 438 million barrels.
The data suggests that India paid a significantly higher average landed price of around $113 per barrel, compared to roughly $67 per barrel during the same period last year. India’s dependence on imported crude also rose slightly, with imports accounting for 89.1% of the country’s crude oil requirement during the quarter.
The surge in prices reflects the premium buyers have been forced to pay as fears of supply disruptions intensified due to the renewed conflict in the Gulf region. While India has prioritized securing uninterrupted energy supplies, doing so has come at a considerable financial cost.
LNG and petroleum trade show similar trend
The impact of higher energy prices was not limited to crude oil. LNG imports also reflected the same pattern, where lower import volumes translated into higher overall expenditure because of elevated global prices.
India imported 7,674 million standard cubic metres (mscm) of LNG during the April–June period, down 8.6% from 8,396 mscm in the corresponding quarter last year. Despite the decline in volumes, the country’s LNG import bill increased by nearly 6%, reaching $3.6 billion.
Petroleum product imports also declined sharply in volume terms, falling by nearly 42% to 7.1 million tonnes. However, the decline in import value was relatively modest due to elevated international fuel prices.
India’s petroleum product exports also witnessed a decline in volume. Exports fell by nearly one-fourth from 15 million tonnes in the April-June quarter of the previous year to 11.3 million tonnes this year. Nevertheless, higher global fuel prices pushed export earnings up by almost 40%, partially offsetting the increased import burden.
Overall, India’s net oil and gas import bill-taking into account crude oil, LNG, petroleum product imports and fuel exports, rose 45.3% YoY to $44.9 billion during the quarter.
Hormuz Strait remains a strategic concern
The Strait of Hormuz remains one of the world’s most strategically important maritime routes for energy transportation. Nearly 40% of India’s crude oil imports, 60% of LNG imports, and 90% of LPG imports originate from or pass through this narrow waterway connecting the Persian Gulf to global markets.
Although an understanding reached between the United States and Iran in June briefly eased tensions and stabilised energy flows, the subsequent collapse of that arrangement has reignited conflict in the region. Reports indicate that energy shipments through the Strait have once again declined after a brief recovery, renewing concerns over global supply security.
For India, ensuring uninterrupted access to energy supplies has become a priority even if it means paying significantly higher prices in international markets.
Economic implications for India
The sharp rise in India’s energy import bill has broader macroeconomic implications. Since energy imports account for a significant share of the country’s total imports, higher oil prices directly affect the trade deficit, current account balance, inflation, and the value of the rupee.
Government data indicates that wholesale fuel and power inflation remained elevated during the first quarter, recording 25% in April, 30.3% in May, and 27.4% in June.
The financial impact of rising crude prices is substantial. India imports nearly 1.8-2 billion barrels of crude oil annually, and every $1 increase in the average price of crude oil raises the country’s annual import bill by approximately $2 billion.
A report by Nomura released earlier this year identified India among the three Asian economies most vulnerable to higher oil prices, alongside Thailand and South Korea. According to the report, a 10% increase in oil prices typically widens India’s current account deficit by around 0.4% of GDP.
PPAC data also shows that India’s crude oil import bill exceeded $122 billion during FY 2025-26. If international crude prices remain close to $100 per barrel throughout the current financial year without a significant reduction in import volumes, the country’s crude oil import bill could surpass $200 billion, placing additional pressure on public finances and the broader economy.
