Global economy in major problem if Russian oil exports disrupt, India's impact limited to $5bn annually: Report

New Delhi: If Russian oil exports were to be disrupted, it could create a major problem for the global economy, however, for India, the impact is expected to be limited, according to a report by Bank of Baroda.

The report stated that according to estimates, the effect on India's oil import bill would be around USD 5 billion annually, an amount considered manageable given the country's overall trade size.

It stated, "For the world economy there could be a greater problem if there is a full embargo on Russian oil exports".

The report mentioned that India's crude oil sourcing pattern has changed significantly in recent years. Before the Ukraine war in 2021-22, Russia's share in India's crude oil imports was modest.

By 2024-25, however, Russia emerged as the largest supplier, followed by Iraq with a 19 per cent share, Saudi Arabia with 14 per cent, and the UAE with nearly 10 per cent.

Together, these four countries accounted for almost 80 per cent of India's oil imports in 2024-25. The United States' share, which had been high in the past, fluctuated and stood at a lower level in recent years.

In terms of prices, there is considerable variation among suppliers due to factors such as logistics, quality, and purchase timing.

In 2024-25, Iraq offered the lowest average price at USD 76.83 per barrel, followed closely by Russia at USD 78.39 per barrel, about USD 1.56 lower than India's overall average price.

The June 2025 data showed the average import price for India at around USD 69 per barrel, with Russia, Iraq, Kuwait, Nigeria, and Brazil offering prices below USD 70 per barrel. Interestingly, Russian oil was not the cheapest that month, as Kuwait and Iraq sold at lower rates.

India imported around 244 million tonnes of crude oil in 2024-25, roughly 1.8 billion barrels. Every USD 1 increase in oil prices translates to about USD 1.8 billion in additional import costs.

Given that June's average price was only USD 2.50 above Russian levels, the report highlighted that the potential impact would be absorbable.

It stated, "The overall impact hence would not be more than USD 4.5-5 bn on an annual basis. Given that overall imports of goods were USD 720 bn, this would not be a significant increase which cannot be absorbed".

Globally, the stakes are higher. Russia accounts for about 10 per cent of global oil supply, and a complete embargo could push prices above USD 80 per barrel in the short term which as per report will strain economies worldwide until alternative supplies are arranged.