India’s crude oil import basket has slipped below the psychologically important $60-per-barrel mark for the first time in almost five years, signaling a major shift in the global energy market.
According to official petroleum data, the Indian crude basket has averaged $59.92 per barrel in January, down from $62.20 in December. This marks the lowest level since February 2021, bringing welcome relief to India’s economy and consumers alike.
The Indian crude basket reflects the actual cost of oil imported into the country and includes a mix of sour crude from Oman and Dubai and sweet crude linked to Brent prices.
Why India’s Crude Prices Are Falling
Global Oversupply Weighs on Prices
Energy analysts believe this downward trend is not temporary. International supply is rising faster than demand, creating pressure on oil prices.
The International Energy Agency (IEA) has projected that global oil supply will exceed demand by nearly 3.85 million barrels per day in 2026, which is roughly 4% of global consumption.
This looming surplus is pushing oil markets into a softer pricing environment.
Crude Could Slide Further by 2026
SBI Research Sees Oil at $50 or Lower
India’s largest lender, SBI, expects crude prices to fall even further. Its latest research report predicts:
- Indian crude basket could reach $53.31 per barrel by March
- Prices may fall to $50 per barrel or even lower by June 2026
If this projection holds, it would be a major positive for India’s fiscal health.
Big Relief for India’s Import Bill
India depends on imports for nearly 88% of its crude oil needs. Even small price movements have a massive financial impact.
Every $1 decline in crude prices saves India nearly ₹13,000 crore annually.
Last year, India imported crude oil worth $161 billion. But in the current financial year, lower prices and higher discounts have already reduced imports to $80.9 billion by November, compared with $92 billion during the same period last year.
This directly helps control inflation, reduce the fiscal deficit, and support economic growth.
Global Oil Prices Are Moving in Opposite Directions
While India’s crude basket has softened, global benchmark prices have shown short-term gains.
- Brent crude is trading near $62 per barrel
- WTI crude is hovering around $58 per barrel
These increases stem from geopolitical uncertainty, especially involving Venezuela, even as long-term supply remains abundant.
Saudi Arabia Sends a Clear Signal
Saudi Arabia, the world’s largest oil exporter, has cut prices for Asian buyers for the third consecutive month.
The kingdom reduced the premium for its flagship Arab Light crude to $0.30 per barrel above Oman-Dubai, down from $0.60 earlier. This move signals weaker demand expectations across Asia.
Venezuela Turmoil Adds to Uncertainty
Geopolitical tensions spiked after US forces captured Venezuelan President Nicolas Maduro. Although Venezuela holds about 17% of the world’s oil reserves, analysts say the country cannot immediately raise production due to years of sanctions and infrastructure damage.
India, once a major buyer of Venezuelan oil, had imported more than 400,000 barrels per day before sanctions cut off supplies.
What It Means for Indian Consumers
Lower crude prices may eventually lead to:
- Cheaper petrol and diesel
- Lower transport and logistics costs
- Reduced inflation
- Improved government finances
However, since India follows a dynamic daily fuel pricing system, any benefit depends on how global trends sustain over time.