India’s crude import bill up 41% in July due to higher freight rates OMCs feel the heat

India’s crude import bill increased significantly to $63.4 billion during the April-July (2026-27) period, up 56.5% from the corresponding period last year, according to data from the Petroleum Planning and Analysis Cell. In July alone, the crude oil import bill rose 41% year-on-year to $13.7 billion on the back of higher freight rates.

The import bill rose at a quicker pace than the volume of crude oil imports, which increased to 21.4 million tonnes from 18.9 million tonnes in the corresponding period last year, the Petroleum Ministry report said.    

Freight rates on major trade routes to India have increased significantly since late February due to the war in West Asia. On key supply routes to India, freight costs have risen by about 137-411% since late February. War-risk insurance for a single Strait of Hormuz voyage has climbed to as high as $7.5-10 million, according to reports.

The sharpest increase has been on the Ras Tanura-India route, where freight for Saudi crude on Very Large Crude Carriers (VLCCs) is estimated at $4.34 a barrel in August, up 411% from $0.85 in late February.

Freight from Corpus Christi in the US has risen 150% to $15.86 a barrel from $6.35, while transportation costs from Russia’s Ust-Luga on Suezmax tankers have increased 137% to $19.90 a barrel from $8.40, according to reports.

Due to increasing crude oil prices, combined with higher freight and insurance costs, the net profits of major Indian oil marketing companies and refiners plummeted.

State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum reported combined net losses of Rs 18,149 crore in the June quarter, compared with their combined net profit of Rs 16,184 crore a year earlier.