India's crude oil import bill jumps 56.5% to $63.4 bn in April-July as volumes stay flat

New Delhi: India's crude oil import bill for April-July stood at USD 63.4 billion, against USD 40.5 billion in the corresponding period of the previous year. That is an increase of 56.5 percent. Net oil and gas imports over the same four months rose to USD 57.8 billion from USD 40.3 billion, a increase of 43.4 percent, data released by Petroleum Planning and Analysis Cell (PPAC) for July showed.

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The country did not buy materially more oil. Crude import volumes over April-July were 81.9 million metric tonnes against 81.5 MMT, a rise of 0.5 percent.

The Indian basket averaged USD 82.04 per barrel in July, against USD 70.95 in July last year, a rise of 15.6 percent. Brent averaged USD 83.41 against USD 70.99, up 17.5 percent.

Against that, the import bill rose 56.5 percent on 0.5 percent more crude.

Oil is available; moving it has become expensive

Sumit Ritolia, Senior Manager (Modelling) at Kpler, has said that longer voyages from Venezuela and West Africa raise freight and insurance expenses, inflating import costs even where physical supplies are adequate.

"Diversification helps with supply security, but it can only go so far in insulating India from geopolitics," Ritolia said. "India will still need to import large volumes of crude, meaning any major disruption will ultimately feed through into higher oil prices, freight and import costs."

He described the wider approach as running on several fronts at once. "India's strategy is increasingly operating on several fronts at once: increasing domestic upstream production where possible, diversifying overseas crude suppliers and transportation routes, building strategic and commercial inventories, and accelerating alternatives such as gas, biofuels, EVs and renewables," he said.

War risk cover for Hormuz transits has risen to as much as 10% of hull value

War risk insurance premiums for tankers transiting the Strait of Hormuz stood at 7.5 to 10 percent of hull value in late July, according to broker Marsh. Weeks earlier the range had been 1 to 3 percent.

Marcus Baker, Global Head of Marine, Cargo and Logistics at Marsh, warned that cover itself may tighten. "I think the more of this we start to see, there is a danger that the market starts to just pull their horns in quite a bit in terms of actually offering cover," Baker said.

By comparison, war risk premiums stood at 0.5 percent of hull value for the Bab al-Mandab Strait and 0.1 percent for the west coast of Saudi Arabia.

Freight followed. Platts assessed crude transport for a 270,000 tonne cargo from the Persian Gulf to China at USD 77.96 per tonne on July 22, up from USD 73.80 two days earlier.

Traffic through the strait thinned sharply. There were 10 transits on July 21 and 16 on July 20, against a pre-conflict baseline of more than 130 a day.

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Sourcing has moved west, and the voyages are longer

India's crude basket shifted substantially over the same period. Middle Eastern supplies fell to roughly 30 percent of imports between April and July, from 43 percent on an annual basis. Latin American supplies, led by Venezuela and Brazil, rose to 12.7 percent from 3.5 percent.

Venezuelan deliveries reached about 444,000 barrels per day in August on ship-tracking data, making Venezuela India's fourth-largest supplier, ahead of the United States at 153,000 bpd and Iraq at 118,000 bpd. Russia remained the largest source at about 2 million bpd. Overall crude imports held at around 5 million bpd.

July figures show the premium narrowing

The July numbers point to some easing. Crude imports for the month were 21.4 MMT, up 13.3 percent year-on-year, at a cost of USD 13.7 billion against USD 9.7 billion. The month's bill rose 41.2 percent.

The net oil and gas import bill for July was USD 11.2 billion, against USD 9.4 billion in July last year, a rise of 19.1 percent. That is what remains after exports are netted off imports. Crude imports cost USD 13.7 billion during the month, petroleum product imports USD 1.3 billion and LNG imports USD 1.2 billion, against petroleum product exports of USD 5.0 billion.

Product exports cushioned the net bill

Export earnings rose even as export volumes fell. Petroleum product exports over April-July were 16.5 MMT against 20.1 MMT, a decline PPAC puts at 17.5 percent. Earnings from those exports rose to USD 16.7 billion from USD 12.4 billion.

Product imports fell on both counts, to 9.0 MMT from 16.4 MMT and to USD 5.6 billion from USD 7.6 billion. LNG import volumes rose 5.3 percent over April-July to 11,867 MMSCM, at a cost of USD 5.6 billion against USD 4.5 billion.

Petroleum now accounts for 23.6% of India's import bill

Petroleum imports made up 23.6 percent of India's gross merchandise imports in value terms over April-July, against 19.7 percent a year earlier. For July alone the share was 19.7 percent, against 17.9 percent a year ago.

The rupee added to the burden. The exchange rate averaged Rs 95.82 to the dollar in July, against Rs 88.31 for FY2025-26 as a whole and Rs 84.57 for FY2024-25. The April-July crude import bill in rupee terms was Rs 5,94,134 crore.

India's overall merchandise trade deficit widened to USD 118.6 billion over April-July from USD 96.7 billion. Net oil and gas imports rose USD 17.5 billion over the same period, accounting for about 80 percent of that widening.

Import dependency on crude, measured on a consumption basis, was 88.3 percent over April-July against 88.5 percent a year earlier. For July alone it rose to 88.5 percent from 86.7 percent.

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