India’s Costly Crude Problem

India faces significant energy vulnerability as global crude oil prices surge and supply chain disruptions in West Asia force the country to source oil from more distant, expensive markets. Prashant Vasisht, Senior VP at ICRA, highlights that while Brent remains a benchmark, physical supply shortages have pushed actual procurement costs nearly $10 above that index. The once-cushioning discounts on Russian crude have largely evaporated due to heightened global demand and sanctions, further straining refiners. While high gross refining margins currently provide some buffer, sustained price volatility threatens to turn marketing margins negative, potentially impacting consumers. With Middle Eastern supply chains disrupted, India’s reliance on imports from the Americas and other regions increases logistical costs. Long-term relief depends on geopolitical stabilization and domestic exploration efforts, though neither offers an immediate solution to the current supply-side pressure.