The price of the Indian crude oil basket, which reflects the cost of crude imported by the country, has averaged $59.92 per barrel so far in January, easing from $62.2 per barrel in December, according to data released by the Petroleum Planning and Analysis Cell (PPAC) on Tuesday. This is the first instance since February 2021 that the Indian crude basket has fallen below the $60-a-barrel level.
The decline is expected to continue in the coming months, in line with softer global oil price trends. Estimates suggest the Indian crude basket could drop further to around $53 per barrel by March and may fall to $50 per barrel or lower by June 2026. With India following a dynamic daily fuel pricing mechanism, lower crude prices could eventually translate into relief at the retail fuel level.
The Indian crude basket is a mix of sour crude grades, represented by Oman and Dubai, and sweet crude grades, represented by Brent Dated, which are processed by domestic refineries.
Lower oil prices significantly ease pressure on India’s import bill, as the country depends on imports for nearly 88% of its crude oil requirements. A $1 per barrel reduction in crude prices lowers India’s annual oil import cost by approximately ₹13,000 crore. In the last financial year, India’s crude oil imports were valued at $161 billion.
In the current fiscal year, softer prices and higher discounts have already helped reduce the crude import bill to $80.9 billion as of November, compared with $92 billion during the same period last year.
Globally, oil prices have seen short-term volatility amid geopolitical developments, even as concerns persist over excess supply. The International Energy Agency has projected that global oil supply could exceed demand by about 3.85 million barrels per day in 2026, or roughly 4% of total global demand.
Meanwhile, Saudi Arabia has lowered the official selling price of its crude for Asian buyers for the third consecutive month, a move widely seen as signalling a cautious outlook on demand. The price cut is closely tracked as an indicator of supply-demand dynamics in the Asian market.
India, which was once a major buyer of Venezuelan crude before US sanctions were imposed in 2020, continues to monitor global developments, although any immediate increase in Venezuelan oil supplies is considered unlikely due to long-standing production challenges.
