Russian Oil Disruption Could Shake Global Markets, But India’s Impact Seen As Manageable: BoB

India’s crude sourcing has undergone a dramatic shift over the past few years. Before the Ukraine conflict in 2021–22, Russian oil accounted for only a small share of imports

Price differences among suppliers remain significant, driven by logistics, quality, and timing of purchases

Source : Freepik

A complete halt in Russian oil exports could have severe repercussions for the global economy, but India’s direct impact would be relatively contained, according to a recent analysis by Bank of Baroda (BoB). The report estimates that such a disruption would raise India’s annual oil import bill by about $5 billion, a figure considered manageable within the country’s $720 billion overall import basket.

“For the world economy, there could be a greater problem if there is a full embargo on Russian oil exports,” the report noted, underlining the broader global risks. Russia supplies around 10 per cent of the world’s crude, meaning a sudden supply loss could lift prices beyond $80 per barrel in the short term until alternative sources emerge.

Russia Now India’s Top Oil Supplier

India’s crude sourcing has undergone a dramatic shift over the past few years. Before the Ukraine conflict in 2021–22, Russian oil accounted for only a small share of imports. By 2024–25, Russia had become India’s largest supplier, followed by Iraq (19 per cent), Saudi Arabia (14 per cent), and the UAE (nearly 10 per cent). Together, these four nations supplied about 80 per cent of India’s oil that year.

Price differences among suppliers remain significant, driven by logistics, quality, and timing of purchases. In 2024–25, Iraq offered the lowest average price at $76.83 per barrel, while Russian oil averaged $78.39—about $1.56 below India’s overall price.

Import Bill Impact Considered Absorbable

In June 2025, India’s average crude import price was around $69 per barrel, with Russia, Iraq, Kuwait, Nigeria, and Brazil selling at under $70. Interestingly, Russia was not the cheapest source that month, as Kuwait and Iraq priced even lower.

Given India’s total imports of around 244 million tonnes (roughly 1.8 billion barrels) in 2024–25, every $1 increase in prices adds about $1.8 billion to costs. Based on June’s pricing, BoB estimates the potential impact of a Russian export halt at no more than $4.5–5 billion annually, an amount the economy could absorb without significant strain.