New Delhi: Russia has announced a strategic increase in its oil prices for India amid the ongoing conflict in the Middle East and the closure of the Hormuz Strait, which has disrupted crude shipments. Earlier, following the Ukraine-Russia war, India benefited from discounted Russian oil, priced $15–30 below global market rates. Now, Moscow plans to sell oil at a premium of $2–5 above international Brent crude rates. With Brent crude hovering around $90 per barrel, India is likely to pay $92–95 per barrel, putting upward pressure on domestic fuel prices.
The move comes as Indian refineries face a supply crunch. Nearly half of India’s crude imports usually pass through the Hormuz Strait, but the ongoing conflict has stalled shipments. This disruption has increased reliance on Russian oil, giving Moscow the leverage to withdraw earlier discounts and sell at strategically higher rates.
The rise in crude prices is expected to directly affect petroleum products in India. Gasoline, diesel, and cooking gas (LPG) prices are anticipated to increase further, following a recent 7% rise in LPG costs. Analysts warn that higher fuel prices could translate into increased transportation expenses, which in turn may drive up prices of essential goods across the country.
Logistical challenges are compounding the situation. With the Hormuz Strait closed, Russian oil must be transported via longer alternative routes, such as around the Cape of Good Hope in Africa. The extended journey increases shipping costs and insurance premiums, further impacting the overall price of crude reaching India.
Market experts say the latest price hike underscores India’s vulnerability to global geopolitical tensions. With the Middle East conflict showing no signs of easing, domestic fuel pricing and inflation are likely to remain under pressure, prompting closer monitoring by both policymakers and energy companies.