If India were to stop purchasing Russian crude oil, global prices could surge to as much as $200 per barrel, according to internal government estimates cited by sources. Such a development, officials warn, would trigger severe disruptions across international energy markets and spark inflationary pressures worldwide.
The officials explained providing context for India’s energy security policy, that Russia, the world’s second-largest crude oil producer with about 9.5 million barrels per day output, nearly 10% of global demand, is also the second-largest exporter, shipping roughly 4.5 million barrels per day of crude and 2.3 million barrels per day of refined products. In the past, fears of Russian oil being banned from global markets had driven Brent crude prices to a high of $137 per barrel in March 2022.
Russia’s share in India’s oil basket has risen sharply over the past three years, climbing from negligible levels in 2021 to nearly 40 percent by 2024. This growing dependence highlights the scale of disruption that could follow if India were to bow to external pressure and cut imports altogether. A report from brokerage CLSA recently cautioned that such a move would drive prices well past $100 per barrel, while internal Indian assessments suggest the figure could soar as high as $200.
“In this challenging environment, India, as the world’s third-largest energy consumer with 85% import dependence, strategically adapted its sourcing to secure affordable energy while fully adhering to international norms,” the govt sources said.
Earlier, United States President Donald Trump on Friday ( EST) claimed that India may cease purchasing Russian oil, calling it “a good step” if confirmed. However, Indian govt has defended its sovereign right to pursue an energy policy in its own national interest.
Reuters claimed on July 31st that Indian state-run refiners suspended purchases of Russian oil amid tariff threats from President Trump and also due to narrowing price discounts. However, India has now rebutted these reports, clarifying that Indian refiners have continued to buy Russian crude based on commercial viability.
Notably, Russian oil has never been sanctioned by the west, but rather subjected to a G7/EU price-cap mechanism to limit Russian revenues while keeping global supplies flowing. This means, EU has lowered the price for Russian oil, and India oil refiners’ purchases are fully legitimate under international frameworks.
The officials added that “Had Indian oil refiners not absorbed discounted Russian crude, combined with OPEC+ production cuts of 5.86 million barrels per day, global oil prices could have surged well beyond the March 2022 peak of 137 dollars per barrel, intensifying inflation globally.”
It was also highlighted that Indian oil marketing companies (OMCs) have refrained from buying Iranian or Venezuelan crude, which is actually sanctioned by the US, and have complied with the $60 per barrel price cap recommended for Russian oil by the US. The European Union has recently recommended a lower price cap of $47.6 per barrel for Russian oil, to take effect in September.
Commenting on Europe’s continued Russian energy imports, govt sources noted the EU was the largest importer of Russian-origin liquefied natural gas (LNG), buying 51% of Russia’s LNG exports, followed by China at 21% and Japan at 18%. For pipeline gas, the EU remained the top buyer with a 37% share, followed by China at 30% and Turkey at 27%.
