Bernstein's research report points out that India's relative cost of imported crude oil has risen significantly, with its crude oil basket price reaching 106.3% of Brent crude, a 6.3% premium over the Brent benchmark. India's cost advantage gained from purchasing discounted Russian crude is fading, and due to supply chain complications caused by the Middle East conflict, India faces higher energy import costs.
The report's data shows that the ratio of India's crude oil basket price to Brent crude has previously been 95.9%, 99.5%, and 100.1%, and has now risen to 106.3%. This means that India's crude oil purchase price has shifted from a discount relative to international benchmarks to a significant premium.
The rise in international oil prices has further amplified the impact of this change on India's energy import expenditures.
Bernstein believes that rising energy costs are increasing pressure on the Indian economy and corporate profits. As an economy highly dependent on crude oil imports, India is sensitive to changes in international energy prices and procurement terms. The bank lists the easing of tensions in the Middle East and the decline in international oil prices as important potential catalysts for the Indian stock market in the next phase, believing that these changes will help alleviate cost pressures and improve market fundamentals expectations.
