India Paid More for Less Crude as Exports Cushioned the Bill

India imported 19 million tonnes of crude in August, 3% less than a year earlier, and still spent $11.7 billion, an 18% jump. Provisional figures from the Petroleum Planning and Analysis Cell, the oil ministry’s data unit, put the Indian crude basket at $90.19 a barrel against $69.11 in August 2025.

The net oil-and-gas bill did not move. It stayed at $9.3 billion, the same as a year earlier, as product exports and weaker cooking-gas and naphtha use offset the dearer barrel. That cushion is already ageing. On 16 September the basket printed $126.88.

Paying More for Fewer Cargoes

August was a step down from a heavy July, not a sudden loss of appetite. Refiners brought in 21.4 million tonnes in July and spent $13.7 billion, after they had stocked up against a longer West Asia war. August volumes were 11.2% lower than that July haul and 3% below August 2025’s 19.6 million tonnes.

The price did the damage. The Indian crude basket averaged $90.19 a barrel in August, up 30.5% from $69.11 a year earlier and up from $82.04 in July. PPAC records the outlay at $11.7 billion, against $9.9 billion in August 2025.

India still leans on seaborne crude for most of what its refineries run. In July, PPAC put import dependence at 88.5% of crude use. Hostilities around the Strait of Hormuz and Bab el-Mandeb, plus higher freight and war-risk cover, raised the landed cost of the barrels that did arrive.

THE AUGUST PRINT

• Crude volume: 19 million tonnes, down 3% from 19.6 million tonnes in August 2025 and down 11.2% from 21.4 million tonnes in July.
• Crude outlay: $11.7 billion, up 18% from $9.9 billion a year earlier, after a $13.7 billion July.
• Basket price: $90.19 a barrel in August, against $69.11 a year earlier and $82.04 in July.
• Net oil and gas: $9.3 billion, unchanged from August 2025, after $11.2 billion in July.

July had already shown how fast the bill can run when volumes and prices rise together. The August print reversed only the volume side of that pair.

The Export Cushion That Held the Net Bill

PPAC valued crude purchases at $11.7 billion and LNG at $1.2 billion, while exports came to $5 billion. The net oil-and-gas bill, which also counts product imports, stayed at $9.3 billion. A year earlier the net figure was the same, even though the crude line was $1.8 billion lighter.

That is the second effect sitting behind the 18% crude-bill jump. Indian refiners sold less product abroad in volume terms in several recent months, then collected more dollars per tonne as diesel and gasoline cracks stayed wide. The commerce department’s goods data for August showed petroleum product shipments among the fastest-growing export lines, and that cash flow is what kept the net energy bill from following crude higher.

CRUDE BILL VERSUS NET BILL

July’s net bill of $11.2 billion is the cleaner comparison for the war year. August clawed that net figure back to last year’s $9.3 billion by importing less crude and by banking product exports, not by finding cheaper oil.

The same machine has a limit. If Gulf loadings keep falling, or if freight takes a larger cut of the delivered barrel, refiners need wider product cracks just to stand still. Cargo-tracking firm Kpler has already flagged that Asian cracks must widen to protect margins as landed crude gets dearer.

Freight Now Takes a Quarter of the Gulf Barrel

The August average of $90.19 does not include the full cost of moving the oil. On some Gulf-to-Asia very large crude carrier runs, freight now 25% of Gulf crude’s free-on-board price, Kpler said on 17 September, up from 17% at the start of the conflict and about 5% before the war.

Kpler put Middle East-to-China VLCC freight at $24 a barrel, and loadings in the Gulf of Oman, outside the Strait itself, at $12 a barrel, or 11% of crude value. Matt Wright, writing for the firm, said Iranian and US attacks in the Gulf had pushed shipping risk to its highest point since the war began, with about 24 successful strikes claimed over two weeks, eight of them attributed to the United States.

India-bound ships are paying a parallel premium. Drewry Maritime Research assessed VLCC freight on the Arabian Gulf-India route at $61.9 a tonne on 14 September, against $34.6 a tonne in August and $10.6 a tonne in February. Rajesh Verma, deputy director of bulk shipping research at Drewry, said spot rates on Arabian Gulf routes had jumped from August levels because of the war-risk premium and the thinner pool of owners willing to transit Hormuz.

HOW THE VOYAGE GOT DEARER

• Share of the barrel: Gulf-to-Asia VLCC freight has gone from about 5% of the fob crude price before the war to 17% at the start of the fighting and 25% now, per Kpler.
• MEG-China VLCC: $24 a barrel, with Gulf of Oman loadings at $12 a barrel, Kpler said on 17 September.
• Arabian Gulf to India: $61.9 a tonne on 14 September, against $34.6 in August and $10.6 in February, per Drewry.

Kpler’s own call is that freight is near a ceiling. If attacks continue at the recent pace, the next adjustment is more likely to show up as lower Gulf loadings than as another leg up in rates. For Indian refiners that is not relief. It is a thinner spot market at a higher delivered cost.

The September scare that Saudi supply to India had been “cut off” mixed a real corridor failure with a false bilateral story. Loadings were disrupted because drone strikes hit the East-West pipeline and ports were blocked, which stopped barrels for every buyer on those routes, not because Riyadh singled India out.

Why Cooking Gas and Naphtha Took the Hit

Domestic product use fell 2.8% to 18.6 million tonnes in August from 19.1 million tonnes a year earlier, PPAC said. Pump fuels did not lead that drop. Petrol use rose 8.2% in August, and high-speed diesel rose 6.8%. LPG consumption fell 17.1% and naphtha fell 22.3%, and those two lines pulled the total into decline.

PPAC’s product table puts August LPG at 2.347 million tonnes, naphtha at 0.828 million, petrol at 3.836 million and diesel at 7.023 million, for a total of 18.606 million tonnes. Diesel’s month-on-month slide from 8.093 million tonnes in July is a monsoon-season pattern. The year-on-year LPG and naphtha cuts are the war showing up in the kitchen and in petrochemicals.

WHAT INDIA BURNED IN AUGUST

Gulf LPG used to be the cheap staple for Indian cylinders. After Hormuz tightened, cargoes swung toward the United States. Kpler-based tallies put US LPG at 0.62 million tonnes in August, after 0.89 million tonnes in July, more than 73% of LPG imports. Longer hauls and higher gas prices are the cost of that switch.

The Centre for Research on Energy and Clean Air, a Helsinki-based research group, estimated India’s extra LPG import cost at $1.1 billion over March to August, on a $4.7 billion LPG bill. Its authors noted that the estimate counts only gas that was bought, not cooking-gas use that households dropped when the cylinder got too dear. Naphtha’s 22.3% fall fits the same price logic: crackers cut runs when the feedstock stops paying.

Russia’s 2.1 Million Barrels a Day

Kpler’s August cargo file still has Russia as the largest single supplier, at 2.1 million barrels a day, more than 40% of imports, after 2.78 million barrels a day in July, or 56%. Overall seaborne imports were about 4.7 million barrels a day, down from a little over 5 million in July, which lines up with PPAC’s drop from 21.4 million tonnes to 19 million tonnes.

The rest of the August slate, on Kpler’s late-month read, was a patchwork of Gulf and Atlantic barrels that do not all need Hormuz. The United Arab Emirates supplied 611,000 barrels a day, Saudi Arabia 385,000 and Venezuela 383,000. West Asian volumes as a group rose about 15% from July, to 1.73 million barrels a day, as Russian Black Sea loadings slipped and refiners reached for whatever was afloat.

AUGUST SUPPLIERS ON THE WATER

• Russia: 2.1 million barrels a day, more than 40% of imports, down from 2.78 million barrels a day and 56% in July, per Kpler.
• United Arab Emirates: 611,000 barrels a day, the second-largest source on that file.
• Saudi Arabia: 385,000 barrels a day, with East-West pipeline and Yanbu loadings later hit in September.
• Venezuela: 383,000 barrels a day, one of the heavier grades Indian plants can run when Gulf sweets get scarce.

The petroleum ministry has told Parliament that India now buys crude from 41 countries, against 27 earlier, and LNG from 15 countries, against six. Suresh Gopi, minister of state for petroleum and natural gas, said in a written Rajya Sabha reply that the wider net had “reduced dependence on any particular country, region or transit route and enhanced India’s ability to manage supply disruptions and market volatility.”

A wider supplier list does not erase a 2.1-million-barrel Russian line, and it does not erase Hormuz. It does explain why August volumes could fall 11.2% from July without a physical shortage at the refinery gate. Spot barrels from the Atlantic and from Gulf loadings that bypassed the Strait filled part of the gap, at a price.

August’s $90.19 Basket Already Looks Cheap

PPAC’s monthly Indian-basket series for 2026-27 is a war chart. April averaged $114.48 a barrel and May $106.23, then the June and July prints eased to $83.22 and $82.04 as some Gulf barrels found workarounds. August’s $90.19 was the turn. The September average through the 17 September update was already $112.97, and the daily print on 16 September was $126.88, which is $36.69 above the August average.

That is why the 18% year-on-year crude-bill rise in August is a lagging number. It captures a month when refiners imported less and when the basket had not yet retested the April high. The freight share Kpler now puts at 25% of Gulf crude was still climbing through that month.

THE 2026 BASKET

1. Late February 2026: US-Israel strikes on Iran open the Hormuz crisis window used in later cost studies.
2. April 2026: Indian crude basket averages $114.48 a barrel, the fiscal-year peak so far on PPAC’s table.
3. July 2026: Imports rise to 21.4 million tonnes and $13.7 billion, with the basket at $82.04 and the net oil-and-gas bill at $11.2 billion.
4. August 2026: Volumes fall to 19 million tonnes and the crude bill to $11.7 billion; the basket averages $90.19 and the net bill returns to $9.3 billion.
5. 16 September 2026: The basket prints $126.88 a barrel, $36.69 above the August average, with September’s month-to-date mean at $112.97.

CREA’s six-month scorecard, published on 26 August, put India’s gross extra fossil-fuel import cost at extra $22 billion in fossil-fuel costs from March to August, behind China at $35 billion, with the EU at $78 billion. India’s net extra cost on crude alone was $20.5 billion. The study compared prices actually paid with pre-war futures, and it left freight and war-risk premiums out, so the $22 billion figure is a floor.

Fossil fuel importers paid a gross extra cost of USD 330 bn for seaborne crude oil, oil products and LNG in the six months following the strikes, against what pre-war futures markets had expected they would pay over the same period.

Luke Wickenden and Lauri Myllyvirta, Centre for Research on Energy and Clean Air

August let India import fewer barrels, export enough product to hold the net bill at $9.3 billion, and still show an 18% crude-bill increase. The 16 September print of $126.88, and freight at a quarter of the Gulf barrel, are the prices that will sit under the next PPAC table.

Frequently Asked Questions

What is the Indian crude basket?

PPAC builds it as a derived mix of sweet crude, Brent Dated, and sour crude, the Oman and Dubai average, weighted by what Indian refineries actually imported that month. The August 2026 sweet-to-sour ratio was 74.94 to 25.06, and the September ratio on the same table is 77.81 to 22.19, so the published dollar average is not a single benchmark such as Brent.

How does India work out the net oil and gas import bill?

The net figure subtracts petroleum-product exports from the sum of crude imports, petroleum-product imports and LNG imports. That is why August’s $11.7 billion crude line plus $1.2 billion of LNG minus $5 billion of exports does not equal the $9.3 billion net bill: product imports sit in the net and are not broken out in the headline crude print.

Does the $22 billion Hormuz cost include tanker freight?

No. CREA’s March-to-August tally is a price shock against pre-war futures on seaborne crude, oil products and LNG, and the authors state that it excludes freight, war-risk premiums, pipeline gas, coal, fuel oil, naphtha and blending components. Diesel in that study ran 59% above pre-war expectations while crude ran 35% above, which is why a crude-only bill understates what importers paid for fuel.

When did the 2026 Hormuz price shock start?

CREA dates the six-month window to the period after US-Israel strikes on Iran in late February 2026, and compares March-to-August prices with the futures curve from 16 to 27 February. Brent averaged $93 a barrel over those six months, 35% above the pre-war curve, and CREA calls that the largest sustained oil-price shock since the 1990 Gulf War.