With the renewed conflict in West Asia between Iran and the US, India’s crude oil basket has surged to $128.70 a barrel as on September 14, according to data from the Petroleum Planning and Analysis Cell (PPAC).
The Indian crude basket had averaged $109.76 a barrel in September so far, compared with $90.19 in August and $82.04 in July. The latest price is nearly 43% higher than July’s monthly average, highlighting the sharp rise in crude prices in recent weeks.
For India, which imports more than 88% of its crude oil requirement, a sustained rise in international oil prices could increase the country’s import bill and put pressure on fuel economics. According to estimates, a $1 increase in crude oil prices sustained for a year could increase India’s import bill by around Rs 18,000 crore. The impact is significant as crude imports already account for a major share of India’s oil import bill. During April-July, the country’s crude import bill reached $63.37 billion, up 56% year-on-year.
For September, the Indian crude basket has an indicative 77.81% share of Brent Dated and 22.19% share of Oman-Dubai crude, compared with 74.94:25.06 in August.
PPAC data shows how quickly crude prices have moved this year. The Indian basket averaged $114.48 a barrel in April and $106.23 in May before falling to $83.22 in June and a low of $82.04 in July. It then rose to $90.19 in August before accelerating sharply in September.
Meanwhile, crude prices in the international market also surged. Brent was trading at $107.7 a barrel at 2.12 pm IST, while US West Texas Intermediate (WTI) was at $103.4 a barrel.
The Indian basket is a derived benchmark comprising Brent Dated crude, representing the sweet grade, and the average of Oman and Dubai crude, representing the sour grade. Its composition changes each month depending on India’s crude import mix.