finance
Strait of Hormuz Closure Cuts Off Over 40% of India's Crude Oil Imports
Two and a half months into the Middle East conflict, India faces surging fuel costs, a record currency low and accelerating capital outflows. Oil Minister Hardeep Singh Puri detailed daily losses of up to ₹1,000 crore for state retailers while the government maintains artificially low pump prices and urges conservation.
May 14, 6:00 PM·2m read2 sources
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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.
