Crude oil prices could rise to $100 if India stops importing from Russia, warns CLSA

Global crude oil prices could surge to as high as $100 a barrel if India halts imports from Russia, brokerage CLSA warned, cautioning that such a disruption would squeeze supply and stoke inflation across oil-importing economies.

India, which sources about 36% of its crude oil imports from Russia, is now under heightened scrutiny after the United States imposed a 25% punitive tariff on Indian exports, citing the country’s continued reliance on Russian crude. In its report, CLSA said that while some media outlets have estimated India’s benefits from discounted Russian crude at between $10 billion and $25 billion annually, the real gains are far smaller.

Limited economic benefit

According to CLSA’s estimates, the net annual benefit to India from importing Russian crude is about $2.5 billion, which is equivalent to just 0.06% of India’s GDP, largely because discounts have shrunk.The brokerage noted that while discounts averaged $8.5 per barrel in FY24, they fell to $3–5 in FY25 and recently dropped to about $1.5. Based on an average discount of $4 a barrel, the savings to Indian refiners amounted to only about $2.5 billion in FY25, and current trends could reduce the annualized benefit to just $1 billion.CLSA also pointed out that Indian refiners need to balance Russian barrels with higher-quality, more expensive crude, limiting the overall advantage. Government import data, the brokerage said, shows no sustained improvement in India’s crude basket price versus benchmarks such as Dubai crude.

Risk of price spike

The brokerage highlighted that if India were to stop importing from Russia, about 1 million barrels per day, which is roughly 1% of global oil supply, could be stranded, at least in the short term. While India could replace the volumes from other suppliers, the sudden disruption would push crude prices to between $90 and $100 a barrel, according to CLSA.“Indian imports of Russian oil provide a much-needed check on crude oil prices as well as curbing the risk of global inflation,” CLSA said. “Economics aside… the issue of Russian crude oil imports has now become a political one, with India reiterating its freedom to choose its trade partners within the purview of global trade rules.”

Political over economic decision

Russia currently exports 4.3–4.8 million barrels per day, or about 5% of global supply, with India and China being its largest buyers. While Europe has banned Russian crude and imposed a price cap, India has adhered to the cap while continuing purchases. CLSA stressed that India is unlikely to voluntarily halt Russian imports unless a global ban is imposed.

Still, the brokerage warned that the debate has moved beyond economics. “This may have become a far bigger political decision on India’s freedom to choose than an economic one,” the brokerage said.

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