New Delhi, March 5: crude oil prices surged over 2% on Thursday amid escalating tensions in the Middle East. Concerns over supply disruptions have driven prices higher, particularly after Iran closed the Strait of Hormuz.
In early trading on the Intercontinental Exchange, the April contract for benchmark crude rose by 2.43%, reaching $83.26 per barrel. Meanwhile, on the New York Mercantile Exchange (NYMEX), the April contract for West Texas Intermediate (WTI) climbed 2.63% to $76.63 per barrel.
Reports indicate that a container ship passing through the Strait of Hormuz was struck by projectiles, causing damage to the vessel.
The continuous rise in oil prices could impact India’s import bill. If crude oil prices increase by $1 per barrel for the entire year, India’s import bill may rise by approximately ₹16,000 crores.
However, government sources suggest that India is currently in a relatively secure position regarding crude oil, LPG, and LNG supplies. The country has about 25 days’ worth of crude oil reserves and 25 days’ stock of petroleum products, including oil en route to Indian ports.
India imports over 85% of its total crude oil needs, with around 50% sourced from Middle Eastern countries, primarily transported through the Strait of Hormuz. Supply through this route has been affected since the Iran war.
In response, India has diversified its oil sources by increasing imports from Africa, Russia, and the United States, while also strengthening energy security through strategic reserves.
In recent years, India has expanded its oil imports from countries beyond the Gulf, resulting in a significant reduction in the volume of oil transported through the Strait of Hormuz.
In the fiscal year ending March 31, 2025, India spent $137 billion on crude oil imports. During the first ten months of the current fiscal year (April 2025 to January 2026), the country spent $100.4 billion on the import of 206.3 million tons of crude oil.
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