New Delhi
India’s benefit from importing discounted Russian crude oil is far smaller than widely claimed, according to a new report. Brokerage CLSA estimated that the net annual gain is just $2.5 billion, much lower than media reports suggesting $10–25 billion. The saving equals only 0.6 percent of India’s GDP.
India sharply increased Russian oil imports after the Ukraine war, raising Russia’s share from under 1 percent of imports to nearly 40 percent in 2024–25. Russia is now India’s top supplier, accounting for 36 percent of its 5.4 million barrels per day demand, followed by Iraq, Saudi Arabia, the UAE, and the U.S. Despite claims of huge savings, government data shows no clear overall discount in India’s crude import prices.
The report said the headline discounts appear large due to the $60 price cap on Russian crude, but extra costs like shipping and insurance reduce the benefit. Discounts averaged $8.5 per barrel in FY24 but fell to $3–5 in FY25 and just $1.5 recently, bringing down actual gains. At current levels, the annual benefit could fall to as low as $1 billion.
CLSA warned that stopping Russian imports could push global oil prices up to $90–100 per barrel, worsening inflation worldwide. It noted that while Russia supplies about 5 percent of global crude, finding buyers for a million barrels per day would be difficult without India.
