India's Crude Oil Import Bill Soars 46% as Middle East Crisis Drives Up Prices

In September, India's crude oil import bill reached $15.4 billion, marking a 46% increase from the previous year's $10.5 billion, as global oil prices and India's import basket surged due to renewed Middle Eastern tensions. The country, which ranks third globally in crude oil imports, experienced a 7% rise in imports compared to September last year, but the price to pay for these imports surged by 46%.

According to the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC), the Indian crude basket, used as a reference for India's import prices, averaged $116.09 per barrel in September, up from $114.48 in April. The Indian crude oil import bill also jumped by 46.3% to $90.6 billion from April to September, rising from $61.9 billion in the same period last year, solely due to the sharp increase in oil prices despite flat or lower import volumes.

This surge in oil prices can be attributed to reduced oil flows from the Middle East and heightened risks to shipping in the Strait of Hormuz, where Iran has closed off the key route due to the ongoing war. The freight rates on the crucial route from Ras Tanura in Saudi Arabia to India have tripled or quadrupled since February 28, when the conflict began.

As the war intensifies, India's import costs for October are expected to surpass the September total of $15.4 billion, with the Indian crude import price averaging $121.25 per barrel so far this month, according to official data.