India's crude oil basket has fallen below pre-conflict levels in West Asia, averaging $67.88 per barrel so far in July, according to data from the Petroleum Planning and Analysis Cell (PPAC). The data showed that the Indian crude basket, which represents the average cost of crude oil imported by the country, stood at $68.21 per barrel on July 3. This is the lowest level since the West Asia conflict began and is even lower than the average of $69.01 per barrel recorded in February, before the crisis.
Crude prices had surged sharply during the conflict, with the Indian basket averaging $113.49 per barrel in March. It moderated to $106.23 per barrel in May, further declined to an average of $83.22 per barrel in June, and has averaged $67.88 per barrel so far in July.
The sharp drop in prices of India basket is a positive development for consumers given that Petroleum Minister Hardeep Singh Puri recently said fuel prices may be reduced in the next few months if crude prices remain stable at current levels. Going by the trend in the Indian basket, fuel prices should fall sooner than expected.
The Indian crude basket comprises sour grades—an average of Oman and Dubai—and sweet grades, represented by Brent Dated, which are processed in Indian refineries.
According to PPAC data, India's average crude purchase price during FY26 stood at $70.99 per barrel. The lowest monthly average during the fiscal was $62.20 per barrel in December, followed by $63.03 per barrel in January.
The West Asia conflict, which began on February 28 following attacks on Iran by the US and Israel, lasted for more than 100 days. During the crisis, shipping through the Strait of Hormuz was severely disrupted, with only a limited number of vessels passing through. The disruption affected India's energy security as nearly 40% of the country's crude oil imports, 50-55% of its LNG imports, and around 90% of its LPG imports pass through the strategic waterway.
On June 17, US President Donald Trump and Iranian President Masoud Pezeshkian signed a Memorandum of Understanding, following which global crude prices started easing. At 7:19 pm IST, Brent crude was trading at around $72 per barrel. Apart from easing geopolitical tensions, higher production by the OPEC+ group and softer demand from China have also weighed on international crude prices.
State-run oil marketing companies — Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) — which together account for over 90% of the country's fuel retail network, have not reduced retail fuel prices even as global crude prices and the Indian crude basket have fallen sharply. During the crisis, petrol and diesel prices had cumulatively increased by around Rs 7.5 per litre by late May.
Private refiner Nayara Energy, which operates over 7,000 fuel stations, became the first fuel retailer in more than two years to cut prices. Effective July 1, it reduced petrol prices by ₹5 per litre and diesel prices by ₹3 per litre.
