How India's Fuel Bill May Rise if Russian Oil Imports Are Halted, SBI Report Finds Out

If India stops importing crude oil from Russia, the country’s crude oil import bill could significantly increase, a recent report by the State Bank of India (SBI) stated.

According to a ANI report, which quoted the SBI study, “If India halted oil imports from Russia for the rest of FY26, the fuel bill might increase by $9 billion in FY26 and $11.7 billion in FY27 due to the increase in prices.”

This report comes at a time when the US government has imposed an additional 25% tariff on all Indian goods and penalties for India's purchases from Russia. Additionally, US President Donald Trump has said that there will be no trade negotiations with India until the tariff dispute is resolved.

On Wednesday, the White House issued an Executive Order imposing an additional 25% levy on Indian goods, raising the total levy to 50%. The US government has cited national security and foreign policy concerns, pointing specifically to India's ongoing imports of Russian oil.

How Russia Plays a Role in India’s Oil Imports

Since 2022, India’s dependence on Russian crude oil has risen. Moscow’s share of India’s total oil imports has surged from 1.7 per cent in FY20 to 35.1 per cent in FY25, making Russia its largest oil supplier.

The shift was largely due to the availability of discounts on Russian oil, priced at $60 per barrel. This came as a move to ensure energy security, after Western nations imposed sanctions on Moscow and avoided its supplies following the invasion of Ukraine.

India imported around 88 million metric tonnes (MMT) of crude from Russia in FY25, out of its total oil imports of 245 MMT, ANI stated in its report.

Before the Ukraine war, Iraq was India's top crude supplier, followed by Saudi Arabia and the United Arab Emirates (UAE).

What Halting Russian Oil Imports Could Mean

The SBI report states, "If India stopped oil imports from Russia during the rest of FY26, then India's fuel bill might increase by only USD 9 billion.”

This would be a direct consequence of buying more expensive oil from other countries. In addition to that, if all countries would stop buying Russian oil, which accounts for 10 per cent of the world’s crude supply, then global oil prices could rise by as much as 10 per cent, given no other countries increase their production.

How Will India Mitigate Impact

Despite a potential increase in India’s import bill, the report from SBI pointed out that India’s diversified supply network and established contracts with other oil-producing nations may help cushion the impact.

India has diversified its oil sources to about 40 countries, including new suppliers like Guyana, Brazil, and Canada. This adds up to the country's energy security.

In addition to that, Indian refiners have annual contracts with its traditional Middle Eastern producers, which allow flexibility to request additional supplies each month, the ANI report mentioned.