Oil Soars Past $83 as Iran Closes Strait of Hormuz, Hits India's Bill

In the early morning trade, the April contract of the benchmark crude on the Intercontinental Exchange was trading at $83.26 per barrel, up by almost 2.43 per cent from its previous close.

The April contract of West Texas Intermediate on the NYMEX went up 2.63 per cent to $76.63 per barrel.

According to reports, a container ship transiting the Strait of Hormuz was struck by a projectile, damaging the vessel.

A continuous increase in oil prices would impact India's import bill. An increase of $1 per barrel of oil for an entire year increases import bill by around Rs 16,000 crore.

Meanwhile, India is in a reasonably comfortable position as far as crude oil, LPG and LNG are concerned, with a stock of 25 days of reserve for crude and 25 days of products including the quantity that is in transit on ships headed for the country's ports, according to government sources.

India imports over 85 per cent of its crude oil requirement of which around 50 per cent is supplied by Middle Eastern countries through the Strait of Hormuz, flows from which have been disrupted following the Iran war.

However, India has diversified its oil sources by increasing imports from Africa, Russia as well as the US and building resilience through strategic reserves.

India has strengthened its energy security by diversifying its oil imports to countries outside the Gulf in the past few years and a large volume of supplies do not come through the Strait of Hormuz now.

The country spent $137 billion on crude oil imports in the financial year ended March 31, 2025. During April 2025 to January 2026 - first ten months of the current financial year as much as $100.4 billion was spent on the import of 206.3 million tonnes of crude oil.

- IANS