India’s oil supply chain showed clear signs of stress in March, with crude imports falling to their lowest level for the month in five years, exports contracting sharply and prices surging, as disruptions to key global energy routes tightened availability and forced refiners to recalibrate sourcing strategies.
Data from the Petroleum Planning and Analysis Cell (PPAC) shows crude imports dropped 17.1% year-on-year to 18.9 million tonne (mt) in March, compared with 22.8 mt a year ago — marking the third consecutive monthly decline and the weakest March performance since 2021.
Historical data indicates imports had risen steadily from 18.3 mt in March 2021 to a peak of 22.8 mt in March 2025, before sharply reversing this year. The contraction comes amid sustained supply disruptions from West Asia, where flows from key producers — Saudi Arabia, Iraq, Kuwait and Qatar — have been affected following the closure of the Strait of Hormuz. Around 30% of India’s crude imports typically transit this route, amplifying the impact of the disruption.
Despite the sharp fall in volumes, the import bill declined only 4.9% year-on-year to $11.7 billion, reflecting the offsetting effect of a steep rise in global prices. The Indian basket crude averaged $113.49 per barrel in March, compared with $69.01 per barrel in February and $72.47 per barrel a year earlier, highlighting the intensity of price pressures.
Tracing the impact of the supply shock
The supply shock has also rippled through refining and export activity. Indian refiners processed about 5.55 million barrels per day in March, around 2% lower year-on-year, as they adjusted to constrained crude availability and shifting supply sources.
Exports of petroleum products saw a sharper correction, declining 24.5% year-on-year to 4.6 mt, down from 6.1 mt in March last year. The fall follows the imposition of export duties on diesel and aviation turbine fuel to ensure adequate domestic availability, with levies currently at ₹55.50 per litre on diesel and ₹42 per litre on ATF.
PPAC data shows that crude throughput stood at 23.5 mt, while total petroleum product output was 25.1 mt, indicating stable domestic demand even as supply conditions tightened. Overall petroleum consumption rose to 21.4 mt, up from 20.7 mt a year earlier, reflecting continued resilience in demand.
Refiners moved swiftly to diversify sourcing. Imports of Russian crude surged to nearly 1.98 million barrels per day (mb/d) in March, up from just over 1 mb/d in February, with India purchasing an estimated 60 million barrels since early March. The shift was supported by temporary easing of sanctions and logistical adjustments.
Fuel consumption trends also showed divergence. Natural gas demand rose 7% year-on-year to 5,727 million standard cubic metres (mscm), as policymakers pushed for increased gas usage to stabilise supply and reduce dependence on disrupted fuel streams. LNG imports rose by over 20% during the month to bridge supply gaps.
For the full financial year 2025-26, India’s crude import bill stood at $121.8 billion, down from $137.2 billion in the previous year, largely due to lower average prices during most of the year despite the late surge.