India Risks $11-bn Hit if Russia Oil Access Tightens

Potential Impact

- Arunima Bharadwaj

With the US imposing a penalty on India for buying oil from Russia, several options exist for the country to diversify its crude purchases as Russian crude accounted for less than 2% of its imports prior to FY23, experts said.

However, the potential impact of cutting off Russian oil from the international market would be a significant increase in international oil prices as Russian oil exports account for 7% of the global liquids consumption, as pointed out by Prashant Vasisht, senior vice president and co-group head, corporate ratings, Icra.

Vasisht said that a significant spike in crude prices could lead to a higher crude import bill and under recoveries on sale of liquefied petroleum gas, petrol and diesel for the oil marketing companies.