Iran says the Strait of Hormuz is now completely closed.
If this disruption lasts, don’t watch crude oil prices. Watch your monthly expenses.
India imports about 88% of its crude oil, and roughly half of those imports are linked to supplies moving through Hormuz. More than 60% of our LPG imports also pass through the same route.
A prolonged disruption means higher crude prices. Higher crude prices mean costlier LPG cylinders, petrol, and diesel. And once fuel costs rise, the impact spreads everywhere.
Vegetables, fruits, milk, groceries, packaged foods, soaps, detergents, plastic products, mobile phones, and appliances can all become more expensive. Not because these products use crude directly, but because higher fuel, freight, packaging, and manufacturing costs eventually get passed on to consumers.
India has strategic reserves and alternative suppliers, so this isn’t an immediate crisis. But if oil stays elevated for weeks, this stops being an energy story and starts becoming an inflation story.