Datanomics: How the West Asia conflict risks inflating India's oil bill

With a drone attack on Saudi's Aramco oil refinery, the recent conflict in West Asia has sent the crude oil market into a tailspin. Crude prices have risen due to the conflict, which is poised to raise India's import bill. Nearly 18 per cent of India’s imports consisted of crude oil in FY26 (Apr-Jan). A major proportion of India's crude oil imports flows through the Strait of Hormuz, which remains an important trade point in the Gulf. Although Iran is at the centre of the conflict, India last imported crude oil worth nearly $1 billion from Iran in FY20. 

 

Oil prices under pressure 

Crude oil prices have increased after the start of the US-Israel-Iran conflict, with the Brent crude spot prices rising from $60.78 per barrel at the start of 2026 to $79.5 on March 2. The Brent spot price jumped by over 7.5 per cent from $73.91/bbl on February 27 to $79.5/bbl on 2 March alone. Indian basket of crude saw pressure when prices rose to a five-month high of $69.01 a barrel in February

 

 

Heavy reliance on Gulf supplies

  India’s crude oil imports from Gulf countries such as Iraq, Saudi Arabia and the United Arab Emirates are largely routed through the Strait of Hormuz. In FY26 (April–December), nearly 50 per cent of India’s oil imports came from West Asia — a marginal increase compared to FY25. 

 

Import dependence rising

  Over 90 per cent of India’s crude oil requirement was met through imports in FY26 (April–January), with the remainder sourced domestically.

 

In comparison, import dependence stood at 84 per cent in FY15.