India’s average crude oil import cost fell below $60 a barrel on Monday, marking one of the lowest levels in five years despite geopolitical tensions and sanctions against Iran, Russia, and Venezuela. On January 5, the daily average price of the Indian basket of crude oil—a mix of sour and sweet grades processed in domestic refineries—stood at $59.29 per barrel, the first time it dipped below $60 since February 5, 2021.
The fall in global oil prices has significantly reduced India’s crude oil import bill, saving an estimated $11 billion on an annualized basis in the first eight months of the 2025-26 fiscal year (April-November). According to the Petroleum Planning and Analysis Cell, India’s crude imports rose 2.44% to 163.4 million metric tonnes during this period, yet the import bill fell 12% in value to $80.9 billion from $91.9 billion in the same period last year.
A report by the State Bank of India (SBI) forecasts further softening of crude prices in 2026, expecting costs to touch $50 per barrel by June 2026. The US Energy Information Administration (EIA) predicts Brent crude will average $55 per barrel in the first quarter of 2026 and remain near that level throughout the year. Falling crude prices are a boost for India, which imports over 88% of the oil it processes.
Even as the US embargoes cheaper crude from Iran, Russia, and Venezuela, India has largely stopped imports from these sanctioned countries, relying on alternative sources. Sector experts note that while a few shipments may still be in transit, the overall impact of sanctions has been minimal.
With oil prices now contributing less to the import bill, India’s energy expenditure has reduced substantially, easing pressure on the rupee. The SBI report emphasizes that internal crude prices are likely to soften regardless of geopolitical events, given oil’s dominant role in India’s import basket and the limited scope for domestic substitution in the short term.