Written by: Salma El-Sakka
India recorded a noticeable increase in its crude oil import bill during September, with costs reaching about $15.4 billion, compared to $10.5 billion in the same month of the previous year. This increase represents a 46% jump, reflecting the economic pressures resulting from soaring global oil prices amid ongoing geopolitical tensions in the Middle East region.
Worsening Energy Costs and the Impact of Geopolitical Crises
According to data released by the Petroleum Planning and Analysis Cell of the Ministry of Oil, the average price of the Indian crude oil basket reached $116.09 per barrel during September. This price level is higher than the costs recorded in April, which then reached $114.48 per barrel, coinciding with the peak of the Strait of Hormuz closure crisis. India, which is the world's third-largest importer of crude oil, suffers from these price pressures even though the volume of its oil imports has witnessed a slight increase of only 7% year-on-year.
Oil Supply Pressures and the Impact of the Strait of Hormuz
Statistics for the period from April to September indicate a 46.3% jump in India's oil import bill, reaching $90.6 billion compared to $61.9 billion in the same period last year. This sharp rise is mainly due to surging oil prices, while import volumes remained stable or decreased in recent months. The risks surrounding shipping operations in the Strait of Hormuz have contributed to an increase in maritime transport costs on the vital route connecting Ras Tanura in Saudi Arabia to India, where shipping costs have doubled three to four times since the crises began in the region.
Future Price Expectations in Indian Markets
India's oil import costs in October are expected to exceed the figures recorded in September, as government data indicates that the average price of the Indian oil basket has so far reached $121.25 per barrel. These challenges continue to impose additional pressures on the Indian economy, with ongoing volatility in global energy markets and their reliance on the stability of supply chains passing through vital corridors, making the national energy bill vulnerable to continuous changes based on geopolitical developments and their direct impacts on global crude oil prices.
