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Middle East Shock Sends India and Pakistan Oil Bills Soaring

Official releases show price-driven import costs have jumped sharply, raising risks to trade balances and inflation in both countries.

Overview

  • Pakistan’s official data released Monday show the country’s FY2025-26 petroleum import bill rose to $16.86 billion, a 5.76% year-on-year increase that exceeds the IMF’s prior $15.28 billion estimate by $1.58 billion.
  • Provisional PPAC figures published Monday show India’s crude import bill for April–June climbed to about $49.8 billion, roughly 60% higher than a year earlier even as import volumes fell slightly.
  • The spike is chiefly price-driven as benchmark crude averaged far higher than a year earlier after renewed USIran/Israel hostilities disrupted shipping through the Strait of Hormuz and raised tanker costs and insurance premiums.
  • Governments and refiners have responded by diversifying suppliers to Russia, Venezuela and West Africa, restricting some refined-fuel exports, and rationing gas to priority users to protect domestic supplies.
  • Economists warn the higher bills are putting immediate pressure on trade deficits, current accounts, inflation and currencies, and that IMF forecasts for Pakistan’s coming years remain at risk if prices or route disruptions persist.