The Indian government has waived customs duty on critical petrochemical products until June 30 to ensure supply stability and provide relief to consumers amid disruptions caused by the crisis in West Asia.
The Indian equity market is set for an event-heavy week, with analysts pointing to the Reserve Bank of India's (RBI) interest rate decision, developments in the US-Iran situation, and crude oil prices as the primary determinants of market trends.
Moody's Ratings has highlighted that Indian banks are among the most exposed in the Asia-Pacific region to the West Asia crisis, primarily due to India's high dependence on energy imports, which could lead to increased inflation, higher interest rates, and strained borrower cash flows.
Historically, India was a major buyer of Iranian crude, importing significant volumes of Iranian light and heavy grades due to strong refinery compatibility and favourable commercial terms.
Petrol and diesel prices have been increased by Rs 3 per litre each, marking the first hike in over four years, as state-run fuel retailers pass on some of the impact from surging global crude prices, which have been exacerbated by the Iran war.
Indian imports of Russian crude oil may stabilise or even decline in 2024 from record 2023 levels amid shrinking discounts, lower output, and a rebound in West Asian supplies, according to the ship-tracking data and industry executives. This may impact the billions of dollars in annual savings that India made last year. Imports of Russian oil jumped by a record 140 per cent in calendar 2023 to 1.79 million barrels a day (b/d) from 740,400 b/d in 2022, when Russia marched into Ukraine in February, and from just 102,000 b/d in 2021, according to the data from Paris-based market intelligence agency Kpler.
'At the first sign of real trouble, that money will move. There will be a run.'
In a statement issued by Iran's consulate in Mumbai, it said, "At present, Iran essentially has no floating crude or surplus available for international markets. The US Treasury Secretary's remarks appear aimed at reassuring buyers and managing market sentiment."
'If the war continue for a longer period of time, it is just a matter of time before the government will pass on some of the price increases.'
A Monaco-based fuel technology company, FOWE Eco Solutions, claims its patented Cavitech fuel emulsion technology can help industries slash fuel consumption, reduce emissions, and improve equipment performance by using water in fuel.
Hydrogen fuel cell technology generates electricity through a chemical reaction using hydrogen, with water vapour as the only emission, making it a cleaner alternative to conventional fossil fuel-based traction systems.
If the conflict continues for a prolonged period, State-run oil companies may have to review retail fuel prices accordingly.
India is well-stocked with inventories of crude oil and key petroleum products, including petrol, diesel, and aviation turbine fuel (ATF), to deal with short-term disruptions as the war intensifies in West Asia, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said on Tuesday.
A Monaco-based fuel technology company, FOWE Eco Solutions, claims its patented Cavitech fuel emulsion technology can help industries slash fuel consumption, reduce emissions, and improve equipment performance by using water.
The Sri Lankan government attributes the sharp depreciation of the rupee against the US dollar to the ongoing conflict in West Asia, citing increased costs for essential imports like gas, fertiliser, and oil.
The targeted eastern area is of immense strategic importance, as it is where the "majority of the country's oil resources are located."
'Once the market decides it wants to go up, it goes up -- no amount of bad news can really hold it back.'
'PM Modi is trying to reduce the volume of fuel consumed instead of raising prices sharply.'
'No one can or will bar India from pursuing its energy goals as it wishes.' 'The US FTA wording may sound more restrictive, but the underlying reality will not undermine India's sovereign energy decisions.'
RBI Governor Sanjay Malhotra stated that the central bank is closely monitoring whether the supply shock from the West Asia conflict will lead to a generalised price rise, potentially necessitating monetary policy action.
The Indian rupee plummeted to an all-time low of 95.80 against the US dollar, settling at 95.66, driven by elevated crude oil prices and escalating geopolitical tensions in West Asia, despite potential RBI intervention and import curbs on gold.
US Secretary of State Marco Rubio has said that the US is ready to sell as much energy as India is willing to buy. He described India as a 'great partner' ahead of his visit to New Delhi.
The Indian government has issued a stern warning to industrial users who are reportedly procuring cheaper retail fuel instead of industrial-grade fuel, leading to significant losses for state-run oil marketing companies (OMCs) and potential local shortages. This diversion, driven by a substantial price difference between retail and bulk diesel, is adversely impacting OMCs, which are absorbing daily losses of approximately 550 crore to keep retail prices stable.
India emerged reasonably well from 2025. But now, the oil shock and war-related supply disruptions have again driven funds out of India and significantly weakened the rupee, points out Ajay Chhibber.
The Indian rupee rebounded against the US dollar after the Reserve Bank of India (RBI) restricted banks' net open positions in dollars. This move prompted banks to sell dollars, providing temporary support for the rupee amidst ongoing geopolitical tensions and rising oil prices.
Analysts warn that global markets are significantly underpricing the risk of an oil price shock, with Brent crude potentially soaring to $150 per barrel if the West Asia conflict escalates or damages critical oil and gas infrastructure. This could lead to severe inflation and economic repercussions, particularly for import-dependent nations like India.
India will maintain multiple sources for crude oil purchases and diversify them to ensure stability in the supply chain with national interests remaining the "guiding factor" for the procurement, Foreign Secretary Vikram Misri said.
The support will be provided to oil-marketing companies (OMCs) in the form of interest-free advances through the ministry of petroleum and natural gas. The OMCs, in turn, will use the fund to provide ATF price stabilisation support to Indian carriers operating domestic and international flights.
Amidst the ongoing conflict in West Asia, the Oil Ministry assures citizens that India's LPG supply remains secure, with no need for panic booking of cylinders. The normal delivery cycle of two-and-a-half days is being maintained, and crude oil is being sourced from diverse routes.
The Indian central government has reduced its total expenditure by approximately 60,000 crore in FY26, below its revised estimate, to successfully achieve the fiscal deficit target of 4.4 per cent of gross domestic product (GDP), according to the latest data from the Controller General of Accounts (CGA).
Congress leader Rahul Gandhi on Monday launched a scathing attack on Prime Minister Narendra Modi over the latest fuel hike, saying mehangai manav has struck again and he has just one job of making promises during elections and attacking people's pockets at other times.
Indian-flagged vessels are navigating the Strait of Hormuz safely despite ongoing tensions in the region, ensuring the continued flow of vital energy supplies to India.
Analysts predict India will face oil price volatility and macroeconomic effects due to the escalating Iran crisis, though the country's oil supply chain is not yet structurally insecure.
India on Friday launched a highly coordinated, priority operation to safely guide 13 Indian-flagged commercial vessels out of the volatile Strait of Hormuz, the ministry of ports, shipping, and waterways announced on Friday.
India's crude oil imports from Russia fell for a second straight month in January to its lowest in 12 months but the nation's insatiable appetite for Russian crude remains for the long term, according to data from energy cargo tracker and industry officials. Russia supplied 1.2 million barrels per day of crude oil to India in January, down from 1.32 million barrels in December and 1.62 million barrels in November 2023, according to data from energy cargo tracker Vortexa. Russia however continues to remain India's top oil supplier, accounting for a little less than a quarter of 4.91 million barrels a day of oil that the world's third largest energy consumer imported in January.
Nayara Energy, a private fuel retailer in India, has increased petrol and diesel prices following a surge in global oil prices due to Middle East tensions. This move contrasts with state-owned retailers who continue to freeze prices.
The escalating conflict in West Asia has resulted in 19 ships carrying essential energy resources for India being stranded in the Strait of Hormuz, raising concerns about potential disruptions to the country's energy supply.
India's wholesale price inflation surged to 8.30 per cent in April, up from 3.88 per cent in March, primarily driven by a significant increase in the prices of fuel, power, and crude petroleum, according to data from the commerce and industry ministry.
India's exports experienced their steepest fall in five months, declining by 7.44 per cent in March to $38.92 billion, primarily due to trade uncertainty and geopolitical tensions, with shipments to West Asia contracting by over 50 per cent.
'Neither do the Israelis. The two attacking parties have very little economic interest in Hormuz.'
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