A $10 per barrel increase in crude prices adds about $13-14 billion to the import bill.
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International crude oil prices surpassed the $100 per barrel psychological mark on Wednesday with India’s monthly average crude oil import basket price rising by more than 13 per cent as the escalation in conflict between the US and Iran exacerbated geopolitical uncertainty, increasing war risk premiums.By late Wednesday evening, Brent was trading at $101.4 per barrel, while WTI was ruling at $96.13. The crude oil price for Indian basket stood at $108.91 per barrel on Tuesday. The average September 2026 price rose to $102.11 a barrel against the August average of $90.19 and is the highest since June.Crude oil (Indian basket) comprises sweet grade (Brent Dated) and sour grade (Oman and Dubai Average) imported by Indian refineries each month. It acts as a key indicator for importing costs, inflation risks and economic impact.Refiners, traders and analysts do not anticipate any major supply disruptions than those already present, such as the closure of the Strait of Hormuz (SoH) and the Bab-el-Mandeb (BeM).Import billHowever, high price means that India’s crude oil import bill will rise. 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.Prashant Vasisht, Senior V-P and Co-Group Head of Corporate Ratings at ICRA, said: “At the average price for September till date, marketing margins on petrol are negative ₹5 per liter and diesel at negative ₹23 a liter and under recoveries on domestic LPG are at ₹200 per cylinder.”If the current geopolitical situation persists, crude oil prices could rise further given that several countries including China were tapping their strategic reserves for a significant proportion of their consumption and their return to the market could increase demand in a period of restricted supplies, he anticipated.N S Ramaswamy, Head of Commodity & CRM at Ventura, said the intensified military actions involving the US, Iran and regional proxies have heightened the oil supply anxiety. The shipping choke points are threatening the global crude flows. It has reignited the physical damage to the gulf refining and production infrastructure. Geopolitical risk premium is back into the market with diminishing prospects for an immediate diplomatic resolution. Brent crude oil’s return of triple-digit price has triggered immediate warning signs across global financial systems, he added.Big impactBesides Brent, the benchmark crude WTI also rallied significantly, trading at $95 a barrel. Vulnerable economies face renewed threats of increasing import bills, widening current account deficit, currency stability and fiscal deficits with the global inflation raising worries on the global economic growth, Ramaswamy pointed out.Jateen Trivedi, VP Research Analyst Commodity and Currency at LKP Securities, pointed out that Rupee traded weak at 95.10, down around 0.32 per cent, as higher crude prices and dollar strength continued to weigh on the currency. Going ahead, crude prices, geopolitical developments and FII flows will remain key triggers.On the economic impact of higher prices, Vinod Nair, Head of Research at Geojit Investments, said that persistent geopolitical uncertainty is making it difficult for major central banks to achieve a balance between growth and inflation, while higher energy costs pose risks to both economic activity and price stability.Published on September 9, 2026
