India imports 88% of its crude oil. More than half of it was sailing through a strait that no ship has crossed in ten days.
The Chokepoint
The Strait of Hormuz carries 20 million barrels of oil daily — roughly 20% of global supply. Since February 28, when US-Israel strikes on Iran triggered the crisis, Iran has shut it down. Not with warships. With cheap drones and an insurance ultimatum: underwriters pulled coverage, and no shipping company will risk an uninsured transit.
Oil is past $100 a barrel. But for most of the world, this is a price shock. For India, it’s something worse.
Why India Is Different
Here’s the number that matters: 55% of India’s crude imports and 69% of its LNG transit the Strait of Hormuz. No other G20 economy has that level of dual exposure — crude and gas simultaneously choked through a single passage.
It gets worse. Between November 2025 and February 2026, India deliberately reduced Russian crude imports under tightening US sanctions — and replaced them with Gulf supply. India locked in maximum Hormuz dependence weeks before the strait closed.
And there’s no buffer. India has zero strategic reserves for LNG or LPG. With 80-85% of LPG imports sourced from the Gulf, a sustained blockade doesn’t just raise prices — it threatens cooking fuel supply for millions of households within weeks.
What Hits Your Wallet
SBI Research estimates this crisis could push CPI inflation up by 80+ basis points and drag GDP growth. Petrol and diesel pump prices will move within days. LPG cylinder costs are already climbing. Electricity and fertilizer — both gas-dependent — follow crude prices up. This compounds the power grid and agricultural stress forecast for summer 2026. The RBI’s decision to hold rates last week now looks like it was made in a different world — facing new inflation pressure from the Hormuz blockade. The 7.8% GDP growth Q3 2026 now faces new economic headwinds from the Hormuz crisis, adding pressure to the rural consumption story.
Alternative routes exist — pipelines from Saudi Arabia and the UAE can bypass Hormuz — but they carry just 2.6 million barrels a day against the 20 million the strait normally handles. That’s a rounding error, not a solution.
India didn’t just get caught in a global energy shock. It walked into the most exposed position possible, right before the door slammed shut.