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India’s average crude oil import cost falls below $60 a barrel
It is among the lowest it has been in five years despite g sanctions against three major crude oil suppliers — Iran, Russia and Venezuela.
India’s average crude oil import cost fell below $60 a barrel on Monday, among the lowest it has been in five years despite global geopolitical upheavals and sanctions against three major crude oil suppliers -- Iran, Russia and Venezuela.
The daily average price of various crude grades (popularly known as Indian basket) dipped to $59.29 a barrel on January 5. The last time, the daily average price of Indian basket stood below $60 was on February 5, 2021 (at $59.34). The Indian basket of crude oil represents a cocktail of sour grade and sweet grade of crude oil processed in Indian refineries.
A research report prepared by e State Bank of India (SBI) said on Monday that crude oil prices would “soften significantly in 2026” to touch $50 per barrel by June 2026. The US Energy Information Administration (EIA) forecast a fall in oil prices to $55 a barrel in 2026.
“We forecast the Brent crude oil price will fall to an average of $55 per barrel in the first quarter of 2026 and remain near that price for the rest of next year,” EIA’s short-term energy outlook said in its report published on December 9, 2025. Falling oil prices are good for India, which imports more than 88% crude oil it processes.
The fall in international oil prices has impacted India’s crude oil import bill significantly by saving around $11 billion on an annualized basis in the first eight months of the current financial year (April-November, 2025-26). India’s oil import bill fell sharply even as its incoming crude shipments surged.
According to the oil ministry’s data keeper – the Petroleum Planning and Analysis Cell -- India’s imports of crude oil increased 2.44% to 163.4 million metric tonnes (MMT) in April-November 2025 from 159.5 MMT in the same period in the previous fiscal year. However, in value terms, the crude oil import bill fell about 12% to $80.9 billion in April-November 2025 as compared to $91.9 billion in April-November 2024.
After a peak of about $71 per barrel in July 2025, prices of the Indian basket softened. The falling trend was more pronounced in the third quarter (October-December 2025). In December 2025, the monthly average crude oil price (Indian basket) fell to a 58-month low of $62.2 a barrel.
India’s energy expenditure has substantially reduced at a time when the US US has embargoed purchases of cheaper and discounted crude oil from three major producers – Iran, Russia and Venezuela. Sector experts and industry executives said on condition of anonymity that India completely stopped import of Iranian crude oil several years ago.
Imports from Venezuela are miniscule (HT reported it on Sunday) and Indian refiners have stopped buying Russian crude from mid-November, they said. There could be some ships in transit on the sea and some cargoes already purchased from non-sanctioned entities, they added.
“Internal crude oil prices expected to soften, agnostic to recent geopolitical events” the SBI report prepared by SBI group chief economic advisor Soumya Kanti Ghosh said. Since oil prices constitute the largest component in the import basket and cannot be substituted with domestic production in the short term, contraction of the import bill on account of crude imports prices will impact the Rupee, he said. “Analysis using recent history suggests that assuming the USD/INR base price of ₹90.28 the 14% expected correction may result in 3% appreciation in rupee that is approximately ₹87.5 per dollar.. a part of this could play out in Q4FY26,” he wrote in the report. And other things remaining the same, the appreciation trend is expected in FY27 as well, he added.
