NEW DELHI: The price of the Indian crude oil basket, which represents the cost of oil imported by the country, has averaged $59.92 per barrel so far in January, down from $62.2 in December, according to data from the Petroleum Planning and Analysis Cell on Tuesday. This marks the first time since February 2021 that the Indian crude basket has slipped below the $60-a-barrel mark.
The softening trend is expected to continue. “Indian basket expected to soften in line with expected trends internationally. Our base case is $50 per bbl (barrel) or even lower by June 2026,” SBI Research said in a report dated 5 January.
The report added that by March, the Indian crude basket could fall to $53.31 per barrel. Given India’s dynamic daily fuel pricing mechanism, the decline in crude prices could be transmitted to retail fuel prices, it said.
The Indian crude basket comprises sour grades—an average of Oman and Dubai—and sweet grades, represented by Brent Dated, which are processed in Indian refineries.
Lower oil prices ease pressure on India’s import bill, as the country meets about 88% of its crude oil demand through imports. Every $1 per barrel decline reduces India’s annualized oil import expenditure by roughly ₹13,000 crore. India imported crude worth $161 billion in the last fiscal year.
In the current fiscal year, higher discounts and lower crude prices have already helped reduce the import bill to $80.9 billion as of November, compared with $92 billion in the same period a year earlier.
Globally, oil prices rose to a one-week high as traders weighed geopolitical risks amid uncertainty in Venezuela, even as concerns about a supply glut persisted. The International Energy Agency has forecast that global supply will exceed demand in 2026 by 3.85 million barrels per day (bpd), equivalent to about 4% of global demand.
Brent crude for February delivery traded at $62.08 per barrel, up 0.52% from the previous close, while West Texas Intermediate (WTI) rose 0.46% to trade at $58 a barrel.
The recent spurt reflects expectations of short-term supply constraints, experts said, though prices are likely to ease over the longer term.
Saudi Arabia has reportedly cut the price of its crude for Asian buyers for the third consecutive month, signalling a cautious outlook. The kingdom set the official selling price for February loadings of its flagship Arab Light crude to Asia at $0.30 a barrel above the Oman/Dubai average, down from $0.60 in the previous month. The pricing is closely watched as an indicator of Saudi Arabia’s assessment of regional demand.
Arab Light last traded at about $60.98 per barrel, according to data from oilprice.com.
“We continue to expect Brent to average at $61.5/b in CY26, as we believe limited additional barrels could enter the market during the current year, resulting in limited downward pressure on oil prices. However, additional barrels from Venezuela may increase supply and weigh on prices beginning next year,” Choice Institutional Brokers said in a report.
Meanwhile, the price spread between WTI and Brent has narrowed to about $4 per barrel. Analysts say this compression could weaken demand for American crude.
“The difference between Brent and WTI has decreased in the recent past. Prices of WTI usually have been lesser given lack of pipelines and transmission capacity in the US. However, as its price comes nearer to that its competitors it may lead to lower demand of the American crude as it would not remain very competitive due to higher logistics cost for importing it,” said Prashant Vasisht, senior vice president and co-group head, corporate ratings, Icra Ltd.
Geopolitical risks intensified over the weekend after American law enforcement forces captured Venezuelan President Nicolas Maduro from Caracas. US President Donald Trump said Washington would effectively run the oil-producing nation and that the US embargo on all Venezuelan oil remained fully in effect.
Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), holds about 17% of global oil reserves, or roughly 303 billion barrels. However, Mint earlier reported that US intervention is unlikely to lead to an immediate increase in crude supplies for global or Indian refiners, given the prolonged production decline in the sanctions-hit Latin American country.
India was once a major importer of Venezuelan heavy crude, importing more than 400,000 barrels per day at peak levels before US sanctions were imposed in 2020.
