Russia currently supplies about 10% of the world’s crude oil, and if several countries were to simultaneously cut off imports from Russia, global oil prices could increase by roughly 10%, according to a report. This potential spike wouldn’t just affect India—it would impact the global economy at large. For India specifically, the financial consequences could be substantial. An SBI report warns that if India halts its imports of discounted Russian oil, the country’s oil import bill could jump significantly—by nearly $9 billion in the fiscal year 2026 and possibly by up to $12 billion in 2027—making fuel purchases far more expensive than before.
The backdrop of this situation lies in the ongoing war in Ukraine and the sanctions imposed by Western nations on Moscow in response. Since 2022, India has taken advantage of the situation by purchasing discounted Russian oil, which was capped at $60 per barrel. This strategy has substantially lowered India’s energy expenses over recent years. In fact, these discounted deals propelled Russia to become India’s top oil supplier. The country’s share in India’s crude oil imports rose dramatically—from just 1.7% in FY20 to a massive 35.1% in FY25. Of the 245 million metric tonnes of crude oil that India imported in FY25, 88 MMT came from Russia alone.
However, if India decides to end these imports partway through FY26, the repercussions could be immediate and severe. SBI projects a sharp $9 billion surge in the oil import bill for FY26, which could escalate to about $11.7 billion in FY27 if global oil prices climb further due to restricted Russian supply. The ripple effect of countries pulling back from Russian oil would likely tighten global supply, thereby pushing prices higher—an outcome that would burden all oil-importing nations, not just India.
Despite these risks, India’s energy strategy is not overly reliant on any single supplier. The country currently imports crude oil from around 40 different nations, including major long-term partners like Iraq, Saudi Arabia, and the UAE. These countries maintain annual supply contracts that can be adjusted based on India’s changing needs. Moreover, newer sources such as Guyana, Brazil, and Canada have recently emerged, enhancing India’s supplier diversity and reinforcing its energy security.
Even though India has options to replace Russian oil, the broader concern is that rising global oil prices could still inflate its import costs. This would strain India’s economy and budget, regardless of where the oil is sourced from. Still, the nation's diversified oil import strategy may help mitigate some of the impact. Nonetheless, in an environment where oil prices remain sensitive to shifting geopolitical dynamics, India will need to navigate its energy policies carefully to manage both affordability and supply security.
