Brent crude remains above $90 a barrel as the prolonged US-Iran conflict and disruptions around the Strait of Hormuz keep pressure on global oil supplies. India faces higher import costs and growing risks to inflation and economic growth.
Crude oil prices have remained above $90 per barrel, as the prolonged conflict between the US and Iran continues to raise concerns over global energy supplies. Persistent uncertainty around the Strait of Hormuz, a major route for international oil shipments, has kept a geopolitical risk premium in crude prices.
Brent crude settled at $90.87 per barrel on August 17, while West Texas Intermediate (WTI) reached $84.50. Prices have risen as diplomatic efforts have failed to produce a lasting resolution and shipping through the Strait of Hormuz remains severely constrained.
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The situation is significant for India because the country depends heavily on imported crude to meet its energy requirements. India imports more than 90% of its crude oil needs, leaving the economy particularly sensitive to international price movements.
The prolonged disruption has already affected India's import bill. India's crude oil imports were worth nearly $50 billion in the first quarter of FY2027, representing a sharp increase from the same period a year earlier.
Indian refiners have responded by adjusting their sourcing strategy. Russia accounted for a record 50.83% of India's crude imports in July, as refiners increased purchases from outside the Middle East amid disruptions linked to the conflict. The share of Middle Eastern crude declined during the same period, while supplies from Latin America also increased.
Higher crude prices can create pressure across the Indian economy by increasing the cost of petroleum products, transportation and industrial inputs. Prolonged price increases could also contribute to inflation and affect household consumption and business costs.
The impact extends beyond crude oil. India's LPG supplies have also been affected by the West Asia conflict, as the country has historically relied heavily on the region for cooking-gas imports. State-run oil companies have faced substantial under-recoveries as they attempt to maintain domestic LPG availability.
The Strait of Hormuz remains the key risk for the global market. Oil shipments through the waterway have fallen dramatically, with traders increasingly preparing for the possibility that supply disruptions could persist rather than quickly reverse.
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For India, diversified sourcing, strategic reserves and government measures provide some protection against an immediate supply shock. However, a prolonged period of crude prices above $90 a barrel could increase the country's import expenditure and put additional pressure on inflation and economic growth.
The latest oil-market movement therefore highlights India's continued exposure to global energy and geopolitical developments, particularly when disruptions affect major oil-producing regions and critical shipping routes.