If Russia loses its support, where will oil come from in India?
Amidst the turmoil in the global market after the Russia-Ukraine war, India, with its diplomatic wisdom, not only met its energy needs but also kept inflation under control. The biggest credit for this goes to the subsidized crude oil being received from Russia. But now the equations have changed. Due to the recent trade agreement with America and changing geopolitical circumstances, India has to look at options other than Russia. Now the biggest question in the mind of the common man is that if cheap Russian oil stops, will the prices of petrol and diesel skyrocket again? Let us understand in detail what opportunities India has now and what effect it is going to have on your pocket.
America’s condition and decreasing imports from Russia
In fact, according to a recent important trade deal between India and America, US President Donald Trump has directly reduced the tariff on Indian goods from 50 percent to 18 percent. But in exchange for this relief, a big condition has been set, India will have to stop importing crude oil from Russia. For the past several months, Trump has been continuously talking about India stopping taking oil from Russia. The effect of which had started becoming visible in the figures.
While India was buying an average of 2.1 to 2.2 million barrels per day of oil from Russia till December 2025, this figure fell to 1 million barrels per day in January 2026. A huge decline may be seen in it in February. However, Indian refinery companies, such as Nayara Energy, which have limited options, may still try to buy Russian oil through routes that are not subject to sanctions. But the picture is clear that India is now reducing its dependence on Russia.
These countries will become the new rowers of India
Withdrawal from Russia does not mean that India is short of options. According to experts and rating agency ICRA, Venezuela can prove to be a game-changer for India. Venezuela has the world’s largest oil reserves and its crude oil falls in the ‘heavy crude’ category, which is generally cheap.
India has state-of-the-art refining capabilities that can easily process this heavy crude oil. Apart from Venezuela, Brazil is also an emerging supplier from which India has started buying oil in recent times. Along with this, Saudi Arabia and United Arab Emirates (UAE) have been traditional partners of India. With this, the way to buy oil from America is also open, but American oil may prove to be costlier than Russian oil. Therefore, the government will focus more on cheaper options like Venezuela so that costs can be controlled.
The cost of extracting oil is lowest in these countries
Production cost means how much it costs to extract one barrel of crude oil from the ground. There are some countries in the world where this expenditure is very less:
- Saudi Arabia: Saudi Arabia has huge reserves of crude oil and they are very close to the ground surface. For this reason, extracting oil here is easy and cheap. It is believed that the cost of extracting one barrel of oil here is between 3 to 9 dollars. Here crude oil is available for around $65.82 per barrel.
- Iran: The average cost of oil production in Iran is about $9 per barrel. Due to government subsidy, petrol and diesel are also available much cheaper within the country. Here crude oil is available for around $68.47 per barrel.
- Iraq: The cost of extracting oil in Iraq ranges between 1.9 to 10.5 dollars per barrel. The crude oil (light and medium crude) here is considered of good quality. Here crude oil is available at around $63.23 per barrel.
- Kuwait: Kuwait is also one of those countries where it is very easy to extract oil. Like other Gulf countries, the production cost here too is generally less than $10 per barrel. Here crude oil is around $65.17 per barrel.
How much will the burden on your pocket increase?
The most worrying thing for the general public is the prices of petrol and diesel. Cheap oil from Russia has saved the Indian economy from inflation in the last few years. If the supply of Russian oil stops completely and India has to buy expensive oil at the market price, then it is estimated that India’s import bill may increase by 9 to 12 billion dollars annually.
That is, if the cost increases, the prices of petrol and diesel may increase by Rs 5 to 6 per liter. But there is also hope for relief here. The government has a strong weapon to cut ‘excise duty’ (excise duty). If oil becomes expensive due to global prices, the government can bear the burden by reducing taxes, so that the common consumer is not directly affected.
Supply will keep coming till March
Even though a deal has been made with America, the oil game does not change overnight. According to the report, Indian companies had finalized many deals with Russia in January and February itself. Delivery of oil under these deals will continue till March.
The situation for India right now is like “laddu in one hand, laddu in the other also”. On one hand, cheap Russian oil is coming under old deals, while on the other hand, routes to America and Venezuela are opening up. On the other hand, if cheap oil starts being available from Venezuela on time and the government gives some relief in tax, then you will not be shocked by the increased prices at the petrol pump.