New Delhi, September 16 The impending threat of tariffs because of Lindsey Graham Bill coupled with closure of the East-West pipeline by Saudi Arabia pushed India’s crude oil import basket price to a five-month high of $131.19 per barrel on Tuesday as fears of supply shocks rose.
This comes at a time when domestic demand generally picks after four months of low mobility with mining, industrial and farm activity gaining traction. The October-December period is also the marriage and festival season.
Tuesday’s Indian basket price of $131.19 per barrel is the highest since March 23, 2026 when it stood at $157.04 a barrel. The month-to-date average Indian basket price in September (till September 15) rose to $111.71 per barrel, up almost 24 per cent from the August average. September’s average is the highest since April. Crude oil (Indian basket) acts as a key indicator for importing costs, inflation risks and economic impact.
Besides, international prices have also risen. As of Wednesday 1830 hours, Brent was trading at $107.6 per barrel, WTI at $104.2 and Murban at $124.
Oil shock
Ankita Pathak, Head of Global Investments at Ionic Asset, said, “Since the onset of the war, Brent oil prices have risen 45.8 per cent and have remained above $100 per barrel for five consecutive trading sessions, highlighting the potential macroeconomic fallout if elevated prices persist.”
Sources said the bigger threat is the fear of supply bottlenecks due to closure of the Saudi Arabian pipeline and the uncertainty surrounding its resumption and how the balance 4 million barrels per day (mb/d) of crude supply can be managed.
“The US Bill is a critical monitorable. It adds to price pressure. The Saudi supply disruption and rising premium on Russian crude is where the pain point is for now. However, it needs to be seen how the US President will impose tariffs at a time when markets fear supply disruptions that will impact refinery runs further impacting petrol and diesel output,” said one of the sources.
With October-December consumption season around and refinery maintenance also beginning, India might have to restrain diesel exports pressuring global markets. It needs to be seen how the US will factor these considering the midterm elections are also close, explained the same source.
The Lindsey O Graham Sanctioning Russia and Iran Act of 2026 empowers US President Donald Trump to impose up to 100 per cent tariffs on buyers of Russian oil and gas. The US House of Representatives is due to vote on it on Wednesday.
Supply strain
Pathak opined that latest disruptions in the Saudi pipeline also highlight that the problem now is increasingly moving towards a supply issue rather than merely a supply-chain issue. With Saudi Arabia estimated to have only around 5–7 days of inventory cushion, any delay in repairs beyond this window could keep oil prices elevated and amplify the broader macroeconomic risks.
Ashish Rajodiya, Head of Commodities at PL Capital, said the Strait of Hormuz (SOH) has already seen disrupted tanker flows, forcing Saudi Arabia to route crude through its East-West pipeline. That alternate route has now come under direct attack, with the pipeline forced offline and Saudi Arabia cancelling export shipments to European customers, pushing its output to its lowest level since 1990.
“Adding to the crisis, Houthi militants have escalated strikes on the Bab el-Mandeb strait, effectively squeezing the market from both ends of the region’s shipping map at once. Libya has compounded the supply strain, suspending activity at several oilfields amid domestic protests,” he added.
On the demand side, Rajodiya explained that China has been drawing down stockpiles and raising import orders, while the US Strategic Petroleum Reserve sits near a record low, leaving virtually no cushion anywhere in the system. Crude is up close to 20 per cent over the past month as a result, and with a reported rise in US crude inventories offering only a modest check on prices, the market’s attention now turns to the (US) Federal Reserve’s rate decision later today.
Published on September 16, 2026
