New Delhi: With the escalating US-Iran tensions and Houthi attacks on Saudi-linked oil shipments pushing the global crude prices to above $100 a barrel again, India’s import bill and inflation risks are expected to rise, even though the country is unlikely to face an immediate supply crunch.
Energy analysts say Russian crude will continue to act as India’s primary buffer against supply disruptions, while the UAE and Oman are expected to emerge as key alternative suppliers if shipments from Saudi Arabia are delayed.
On Thursday, Brent crude crossed the $100 per barrel mark for the first time since May 2026 after geopolitical tensions intensified. The rise in price was driven by the collapse of the US-Iran agreement and the Houthis blockade of Saudi oil moving through the Bab el-Mandab strait at Red Sea.
According to Natalia Katona, a commodity analyst based in Abu Dhabi, Russian crude remains “a crucial part of the solution” for India despite becoming more expensive.
She said Russian crude, which was previously trading at a discount of about $7 per barrel to Dubai crude, has now moved to a premium as India, China and Turkey are competing for the available cargoes. At the same time, supplies of comparable medium-sour crude from the Gulf have tightened because of disruptions at both the Strait of Hormuz and the Bab el-Mandab strait.
Despite the higher prices, Katona said India is expected to increase purchases of Russian oil to replace the roughly 3,25,000 barrels per day of Saudi crude that it had been importing before the Bab el-Mandab strait disruption.
However, she warned that September could prove particularly challenging. “The Houthi attacks on Saudi-linked tankers suggest that the threat to Saudi trade is credible, raising the risk of delayed cargoes from Yanbu,” Katona told ThePrint.
In such a scenario, she expects the UAE and Oman to become India’s main emergency suppliers because their crude can reach Indian refineries in just five to six days.
Katona pointed to the pricing of the UAE’s Murban crude as evidence of near-term supply tightness. The September cargoes are trading at around $106 per barrel compared to about $94 per barrel for October, indicating that the market expects an acute shortage of prompt supplies while also betting that the disruption will be temporary.
“For India, this means sufficient oil should still be available, but September supplies will come at an exceptionally high price,” she said.
Nikhil Dubey, Lead Analyst for Oil Markets at Kpler, said India’s crude supplies are largely secure till August, but warned that prolonged disruptions would make it increasingly difficult for refiners to source crude and will significantly raise import costs.
“The rally in crude prices towards $100 per barrel has been primarily driven by escalating geopolitical tensions that have significantly tightened the global supply outlook,” Dubey told ThePrint.
He added that if crude prices remain elevated for a prolonged period, the impact would extend well beyond the energy sector.
“Higher import costs would inevitably trickle through the economy. The impact is likely to cascade across almost every aspect of the economy, from transportation and manufacturing to food prices, exacerbating inflationary pressures and increasing the burden on policymakers,” he said.
For India, which imports more than 85 percent of its crude oil requirement, sustained oil prices above $100 per barrel could widen the trade deficit, increase subsidy pressures and complicate the government’s efforts to keep inflation under control, even if alternative supplies prevent any immediate disruption to fuel availability.
(Edited by Ajeet Tiwari)
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