Rising crude prices add to market pressure<\/p>\n
The US-Israel versus Iran war has caused instant geopolitical tensions that are also reflected in rising global oil prices. For India, the crude oil basket prices per barrel have jumped to US$85.4 in March 2026 from US$69.01 in the previous month.<\/p>\n
Crude Oil FOB Price (Indian Basket) (Value in US$\/bbl) FY 2025-26<\/p>\n
April<\/p>\n
May<\/p>\n
June<\/p>\n
July<\/p>\n
Aug<\/p>\n
Sept<\/p>\n
Oct<\/p>\n
Nov<\/p>\n
Dec<\/p>\n
Jan<\/p>\n
Feb<\/p>\n
March<\/p>\n
67.72<\/p>\n
64.04<\/p>\n
69.77<\/p>\n
70.95<\/p>\n
69.11<\/p>\n
69.61<\/p>\n
65.08<\/p>\n
64.31<\/p>\n
62.2<\/p>\n
63.08<\/p>\n
69.01<\/p>\n
85.4<\/p>\n
Source: Petroleum Planning and Analysis Cell, GoI.<\/p>\n
Understanding crude oil prices and what US$\/bbl means<\/p>\n
To interpret crude oil data correctly, it helps to understand how oil prices are quoted and how they translate into actual quantities and costs.<\/p>\n
What does US$\/bbl mean?<\/p>\n
In the oil industry, prices are usually quoted as US dollars (US$) per barrel (bbl), the standard unit used to measure crude oil.<\/p>\n
So, US$\/bbl simply means the price in US$ for one barrel of crude oil.<\/p>\n
How much oil is in one barrel?<\/p>\n
One barrel of crude oil contains about 159 liters. For example, if crude oil costs US$70\/bbl, then:<\/p>\n
159 liters cost US$70
\nPrice per liter \u2248 US$70 \u00f7 159 \u2248 US$0.44<\/p>\n
Russian oil waiver and strategic energy balancing<\/p>\n
According to a Reuters report citing energy analytics firm Kpler<\/a>, roughly 145 million barrels of Russian crude remain stranded on tankers at sea. With the US waiver in place, some of these cargoes could potentially be redirected toward Indian ports if commercial agreements are finalized.<\/p>\n Russian crude currently accounts for about 20 percent of India\u2019s total oil imports, making India one of the largest buyers of discounted Russian energy since Western sanctions were imposed after the Russia-Ukraine war.<\/p>\n The waiver also reflects a pragmatic adjustment in Washington\u2019s approach to India\u2019s energy purchases. Tensions between the two countries had recently escalated after the Donald Trump-led US-administration imposed tariffs on Indian goods, including an additional duty linked to India\u2019s purchases of Russian oil.<\/p>\n However, in February the two countries reached a trade understanding that lowered tariffs to 18 percent<\/a>, signaling a partial easing of trade tensions.<\/p>\n India has consistently defended its energy procurement strategy, arguing that it must secure affordable supplies to meet the needs of its large population and growing economy. New Delhi maintains that its trade relationships and energy sourcing decisions will not be dictated by external pressure.<\/p>\n ALSO READ: India FTA Tracker 2026: Live Updates on Trade & Economic Pacts<\/a><\/p>\n Sectoral dependence on crude oil in India<\/p>\n Crude oil remains a foundational input for India\u2019s energy system and economic activity. Once refined, it is converted into a range of petroleum products, such as petrol, diesel, LPG, aviation turbine fuel (ATF), bitumen, and naphtha, that support transportation, household consumption, aviation, construction, and industrial production. As a result, fluctuations in crude oil prices or supply disruptions can quickly ripple across multiple sectors of the Indian economy.<\/p>\n Transport sector: Largest consumer<\/p>\n As per the monthly report of the Petroleum Planning and Analysis Cell (PPAC)<\/a>, India\u2019s transport sector accounts for the largest share of petroleum consumption in India. Petrol (motor spirit) is primarily used by passenger cars, two-wheelers, and three-wheelers, while diesel (high-speed diesel) powers freight trucks, buses, agricultural machinery, and logistics operations. Rising vehicle ownership and expanding mobility have steadily increased fuel demand.<\/p>\n In January 2026, petrol consumption reached approximately 3.51 million metric tonnes (MMT), reflecting a 6.1 percent y-o-y increase.<\/p>\n Household energy demand<\/p>\n LPG, another crude oil product, plays a critical role in household energy consumption, particularly for cooking. Government initiatives to expand access to clean cooking fuel have significantly increased LPG penetration across urban and rural households. In January 2026, LPG consumption stood at 3.0 MMT, recording 7 percent y-o-y growth, with India now accounting for over 330 million active LPG connections countrywide.<\/p>\n Aviation sector<\/p>\n India\u2019s aviation industry depends on ATF, a refined petroleum product used by commercial airlines. As domestic air travel continues to grow, demand for ATF has steadily increased. In January 2026, ATF consumption reached 828,000 metric tonnes, representing a 5.5 percent y-o-y rise, reflecting expanding airline operations and passenger traffic.<\/p>\n Infrastructure and construction<\/p>\n Bitumen, another crude-derived product, is essential for infrastructure development. It is widely used in road construction, highway expansion, and urban infrastructure projects. As India continues to scale up public infrastructure investment, bitumen demand has remained strong. Consumption reached 797 thousand metric tonnes in January 2026, highlighting the sector\u2019s reliance on petroleum-based inputs.<\/p>\n Manufacturing and industrial production<\/p>\n Several industries rely on petroleum products as both fuels and raw materials. Naphtha serves as a key feedstock in petrochemical and plastics manufacturing, while furnace oil and low-sulphur heavy stock are used as industrial fuels for boilers and power generation. Petroleum coke (petcoke) is widely used in cement production and other heavy industries. As industrial activity expands, demand for these petroleum-based inputs typically rises in tandem.<\/p>\n Overall, India\u2019s petroleum consumption reflects the broad dependence of its economy on crude oil. Total petroleum product consumption reached 21.05 MMT in January 2026, representing 2.5 percent growth compared with January 2025.<\/p>\n This trend underscores how crude oil continues to underpin transportation, household energy access, infrastructure development, and industrial growth across the country.<\/p>\n Critical business insights: Implications of the energy disruption for companies in India<\/p>\n For businesses operating in India, the current developments around the Strait of Hormuz and the ongoing war involving Iran, Israel, and the US have several strategic implications.<\/p>\n 1. Energy price volatility will affect operating costs<\/p>\n The sharp increase in India\u2019s crude basket price, from US$69.01 per barrel in February 2026 to US$85.4 in March 2026, signals rising input costs across the economy. Companies that rely heavily on fuel, such as logistics, aviation, manufacturing, and construction, are likely to face higher operating expenses.<\/p>\n Businesses may therefore need to adjust pricing strategies, cost structures, and procurement contracts to manage margin pressure.<\/p>\n 2. Supply chain disruptions could affect energy-intensive industries<\/p>\n Nearly half of India\u2019s crude oil imports pass through the Strait of Hormuz, making the route one of the most critical supply corridors for the country\u2019s energy security. Any prolonged disruption could tighten supply availability.<\/p>\n Recent developments already show early signals:<\/p>\n Petronet LNG declared force majeure after LNG shipments could not reach Ras Laffan Industrial City. This indicates that industrial gas and fuel availability may become volatile, particularly for sectors like:<\/p>\n Chemicals and fertilizers 3. Diversification of energy supply is accelerating<\/p>\n India\u2019s crude import data shows a gradual shift in sourcing patterns. While Russian crude remains significant, its share declined from 36.4 percent to 30.4 percent during April-January FY 2025-26.<\/p>\n Find Business Support<\/p>\n At the same time, imports from the US increased by nearly 64 percent, while purchases from the UAE, Nigeria, and Brazil also rose sharply.<\/p>\n For businesses, this trend suggests:<\/p>\n India\u2019s refiners will increasingly pursue supplier diversification 4. Currency and inflation risks may increase<\/p>\n Higher oil prices directly affect India\u2019s import bill, which in turn influences inflation, currency stability, and fiscal balances.<\/p>\n If crude prices remain elevated:<\/p>\n Transport and logistics costs may rise For companies operating in India, this environment may require hedging strategies, cost pass-through mechanisms, and stronger supply-chain planning.<\/p>\n CLICK HERE: Iran Conflict Impact on India: Oil, Rupee & Trade Risks<\/a><\/p>\n 5. Strategic opportunities for energy and infrastructure investors<\/p>\n While the crisis introduces risk, it also opens new investment opportunities. India\u2019s dependence crude oil imports, currently around 90 percent of total demand, is likely to accelerate policy support for:<\/p>\n Strategic petroleum reserves Companies involved in energy infrastructure, renewables, storage, and logistics may benefit from increased government focus on energy security.<\/p>\n Integrate Energy and Geopolitical Risk into Your 2026 Business Planning<\/p>\n The 2026 disruptions across West Asia highlight how quickly oil and gas supply shocks can affect energy prices, inflation, currency stability, and global trade flows. For businesses operating in or with India, integrating energy security and geopolitical risk scenarios into financial, sourcing, and operational strategies is becoming increasingly important.<\/p>\n Our team supports companies in assessing supply chain exposure<\/a>, commodity price risks, and policy developments affecting India\u2019s energy landscape. Send your business inquiries to: India@dezshira.com<\/a>.<\/p>\n About Us<\/p>\n India Briefing<\/a> is one of five regional publications under the Asia Briefing<\/a> brand. It is supported by Dezan Shira & Associates<\/a>, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Delhi<\/a>, Mumbai<\/a>, and Bengaluru<\/a> in India. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China<\/a>, Hong Kong SAR<\/a>, Vietnam<\/a>, Indonesia<\/a>, Singapore<\/a>, Malaysia<\/a>, Mongolia<\/a>, Dubai (UAE)<\/a>, Japan<\/a>, South Korea<\/a>, Nepal<\/a>, The Philippines<\/a>, Sri Lanka<\/a>, Thailand<\/a>, Italy<\/a>, Germany<\/a>, Bangladesh<\/a>, Australia<\/a>, United States<\/a>, and United Kingdom and Ireland<\/a>.<\/p>\n For a complimentary subscription to India Briefing\u2019s content products, please click here<\/a>. For support with establishing a business in India or for assistance in analyzing and entering markets, please contact the firm at india@dezshira.com<\/a> or visit our website at www.dezshira.com<\/a>.<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"The escalation of the US-Israel-Iran conflict in the Strait of Hormuz has transformed India\u2019s energy stability into a…\n","protected":false},"author":2,"featured_media":325035,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[42,43,40,38,41,39],"class_list":["post-325034","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-news","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/325034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=325034"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/325034\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/325035"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=325034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=325034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=325034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nMajor energy companies such as GAIL (India) Limited and IOC reportedly began reducing gas supplies to industrial users.<\/p>\n
\nPetrochemicals
\nManufacturing
\nPower generation.<\/p>\n![\"\"](\"https:\/\/d2h56l9e5xqoi4.cloudfront.net\/dsa_website_assets\/2025\/img\/dsa-logo-2nd.svg\"){kind=logo}
<\/a><\/p>\n
\nEnergy procurement strategies will become more geopolitically sensitive
\nPricing benchmarks may fluctuate as new trade routes emerge.<\/p>\n
\nManufacturing input costs could increase
\nConsumer inflation may accelerate<\/p>\n
\nRenewable energy expansion
\nDomestic refining and petrochemical capacity
\nLNG infrastructure and alternative fuels.<\/p>\n