Strait of Hormuz Closure Cuts Off Over 40% of India's Crude Oil Imports

The Strait of Hormuz remained closed on May 14, 2026, two and a half months after the Middle East conflict began, cutting off more than 40 percent of India's crude oil flows. As the world's third-largest crude oil importer, India has seen its oil marketing companies absorb daily losses of up to ₹1,000 crore because the government is keeping pump prices artificially low to protect consumers.

Oil Minister Hardeep Singh Puri said the energy sector is absorbing the brunt of the impact.

OMCs are buying crude, gas and LPG at higher cost, but in order to protect consumers, they are selling final products at lower cost leading to massive mounting losses of up to ₹1,000 crore per day. However, the OMCs have ensured uninterrupted energy imports and supply,” he stated.

Prime Minister Narendra Modi this weekend urged Indians to curb gasoline and diesel consumption, use public transportation where possible, and car pool as much as possible. ” The rupee hit a new all-time low against the dollar this week. Foreign investors have pulled more than $20 billion from Indian equities in the first four months of 2026, already surpassing last year’s full-year record outflows.

7 percent last year. 5-Year High as Fuel Costs Surge 25 percent. Dhiraj Nim, an economist at ANZ bank, said price relief at the pump cannot last.

“I am assuming that sometime in Q2, rather sooner than later, they will have to hike retail fuel prices because neither the fiscal buffers nor (the) buffers with the OMCs (oil marketing companies) are enough to withstand a prolonged shock,” he told Reuters last week.

India holds 69 days’ worth of crude oil stocks and 45 days of LPG supply, according to Puri. Some LPG tankers have passed through the Strait of Hormuz since the war began, including two India-bound vessels that cleared the chokepoint in dark mode.

The government has asked state refiners to maximize the output of LPG and has redirected supply from industrial users to household consumers. It has also cut taxes on gasoline and diesel while Modi ordered a 50 percent slash in motorcade size to save fuel. Modi's Fuel Price Freeze Is Costing State Retailers Billions.

U.S. to extend its Russian oil waiver as imports from Russia hit record highs. The IEA revised its 2026 forecast, widening the projected oil deficit as the Iran war cuts production.

3 Billion as High Prices Offset Production Losses. com reported that analysts expect fuel price hikes in the second quarter if the conflict continues, noting that neither government fiscal buffers nor oil marketing company reserves can sustain the shock indefinitely.