{"id":2645,"date":"2025-12-25T20:07:56","date_gmt":"2025-12-25T14:37:56","guid":{"rendered":"https:\/\/tradebrains.in\/money\/?p=2645"},"modified":"2025-12-25T20:07:58","modified_gmt":"2025-12-25T14:37:58","slug":"why-a-weaker-rupee-doesnt-spike-oil-prices-but-hits-other-sectors-harder","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/money\/why-a-weaker-rupee-doesnt-spike-oil-prices-but-hits-other-sectors-harder\/","title":{"rendered":"Why a Weaker Rupee Doesn\u2019t Spike Oil Prices but Hits Other Sectors Harder"},"content":{"rendered":"\n
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Synopsis<\/strong>: From April to mid-December rupee fell 4-5% but it didn’t affect oil prices. A weaker rupee doesn\u2019t always translate into higher domestic oil prices due to government pricing controls, subsidies, and tax adjustments. This article explains the reasons why domestic oil prices was not impacted.<\/em><\/p>\n<\/blockquote>\n\n\n\n

During the year 2025, the currency of the Indian rupee lost value by almost 5% against the dollar which is a noticeable drop. India is importing more than 85% of its crude oil, 95% of its gold, 60% of its cooking oil, and most of the semiconductor components, medicines, fertilizers, and FII pulls out the money from the Indian market and invests in the American market because of the AI boom. Importing so many essential goods, the country suffers an increase in cost for every single point of rupee depreciation, making the fuel in your car, the medicine in your cabinet, and the phone in your pocket costlier as well.<\/p>

\"scapia<\/a><\/div>\n\n\n\n

But Why didn’t Oil prices react when the Rupee fell<\/strong><\/h2>\n\n\n\n

In this scenario, where the cartel has such strong control over the market, Russia has stepped up as a key alternative. Starting from April 2025, Russian crude was offered at a very low price below the market price $1.70-2 per barrel. But the situation changed drastically in late October when the U.S. imposed sanctions on Rosneft and Lukoil, the two largest Russian oil producers. At that time, the price of Russian oil fell dramatically to a discount of $7 per barrel. As a result, the absolute price of Russian oil in December 2025 dropped even lower to $35 per barrel, which was a remarkable 50% discount off the $70 Brent crude.<\/p>\n\n\n\n

India’s position in this matter is truly beneficial. If India were to replace 35% of its crude imports with Russian oil which is the maximum allowed based on the refinery’s configuration optimized for Middle Eastern crude, the blended import cost of oil would go down from $70 per barrel to the approximate figure of $60.81 per barrel, a reduction of 13% in the annual import bill amounting to around $15\u201316 billion savings in hard currency every year.<\/p>