India’s crude oil import basket price rose by almost 12 per cent m-o-m to surpass the $100 per barrel psychological mark earlier this week as conflict in West Asia continues to simmer, exacerbating geopolitical uncertainty.
The crude oil price for Indian basket stood at $100.75 per barrel on Monday against an average of $90.19 a barrel in August 2026. The current price is the highest since June. The Indian basket crude price averaged $82.04 per barrel in July against $83.22 during June.
Refiners, traders and analysts do not anticipate any major supply disruptions that those already present, such as the closure of the Strait of Hormuz (SoH) and the Bab-el-Mandeb (BeM).
However, the higher price means that India’s crude oil import bill will rise further. Besides, a weak Indian rupee against the US dollar also adds to the rising current account deficit (CAD). A $10 per barrel increase in crude prices adds about $13-14 billion to the import bill.
For instance, India imported roughly 81.9 million tonnes (mt) of crude oil worth $63.4 billion during April-July in FY27, compared to 81.5 mt of crude worth $40.5 billion in the year-ago period. The net oil and gas were also higher at $57.8 billion compared to $40.3 billion during the same period.
The price of Brent crude averaged $83.41 per barrel during July 2026 against $85.47 in June and $70.99 during July 2025.
For the week ending September 4th, Brent rose 2.8 per cent W-o-W to $96.3 per barrel (up 12.5 per cent over 3 months), data from Equirus Securities showed.
The Indian Crude Basket rose 3.8 per cent W-o-W to $99.4 a barrel (up 15.4 per cent over 3 months) and the US Dollar-Indian Rupee was broadly flat W-o-W at 94.5, it added.
“Petrol marketing margin turned deeper negative at ₹4.2 per litre from a negative of ₹2, while diesel margin was little changed at a negative of ₹24.9 per litre vs negative of ₹24.8,” the brokerage said.
Prashant Vasisht, Senior VP & Co-Group Head, Corporate Ratings at ICRA noted that renewed hostilities between Iran and the US, pose a challenge for the limited crude oil supplies coming through the Strait of Hormuz.
Further, as Iran threatens to establish a new restricted maritime zone extending beyond the Strait of Hormuz, additional energy flows beyond the latter could be at risk, he anticipated.
“Owing to these developments, crude oil prices have increased in the past few days and Indian crude basket has crossed the $100 per barrel mark. As a result of the surge in crude prices, marketing margins on auto fuels are likely to turn negative and domestic LPG under recoveries could increase from the current around Rs 200 per cylinder,” Vasisht said.
Norbert Rücker, Head Economics and Next Generation Research at Julius Baer, said on Tuesday that the images of attacked and capsized oil tankers have had an impact. Hostilities in the Middle East have lifted oil prices beyond $95 per barrel. The key question is whether the latest tensions will evolve into a more serious escalation and threat to global energy supplies.
The oil price reaction appears at odds with the oil market’s surprisingly stable working given the intensity of the conflict, he added.
While the flows are somewhat erratic and covert, overall exports out of the Middle East seem to have recovered to around 75 per cent of pre-crisis volumes. Storage confirms the observation. Oil supplies are holding up much better than feared. Storage is ample in Europe and Asia. In the US, the deficit is narrowing, and strategic storage has been drained less than expected.
“Oil seems to be in a phase where the conflict’s gridlock and recurring hostilities are regularly awakening a risk premium embedded in prices. Today, the risk premium seems exceptionally bloated and ripe for deflation, unless the ongoing clashes bring serious infrastructure damage. We stick to our cautious view and see downside risk to oil prices,” Rücker explained.
Published on September 9, 2026
