India’s crude imports drop 40% after Hormuz closure, pressuring inflation, FX reserves, and GDP growth amid prolonged conflict.
India’s oil crisis is escalating as the Strait of Hormuz remains shut for over two months, cutting off 40% of its crude imports. The disruption is fueling inflation, draining foreign exchange reserves, and threatening economic growth in Asia’s third-largest oil importer.
Before the closure, India relied on Hormuz for nearly half its crude flows, with imports averaging 4.5 million barrels per day. The conflict has forced the country to seek costlier alternatives, straining fiscal balances and widening the current account deficit.
Markets are pricing in higher inflation risks, with bond yields rising and the rupee weakening against the USD. Analysts warn of prolonged pressure if the blockade persists.