Will Iran-US War Trigger Fresh LPG Shock For India? Why Crude Oil Supplies May Stay Secure

Published 12 July 2026 · finance

Will Iran-US War Trigger Fresh LPG Shock For India? Why Crude Oil Supplies May Stay Secure Published By, Last Updated: July 12, 2026, 18:47 IST

Will Iran-US War Trigger Fresh LPG Shock For India? Why Crude Oil Supplies May Stay Secure Published By, Last Updated: July 12, 2026, 18:47 IST Greater attention should now be paid to LPG and LNG markets, which have fewer short-term alternatives and remain more vulnerable to disruptions. Rapid Read A man drags a refilled LPG cylinder amid the ongoing supply crisis, at the McLeodganj Chowk, in Dharamshala, Himachal Pradesh. (IMAGE: PTI) The latest phase of the US-Iran war has once again raised concerns over the availability of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and crude oil in India. During the initial months of the conflict, triggered by US strikes that killed Iran’s Supreme Leader Ali Khamenei, fears of supply disruptions rattled energy markets. Iran on Sunday announced it was closing the Strait of Hormuz and launched missiles and drones at Gulf neighbours after the US carried out another round of strikes, escalating the conflict further. US CENTCOM, hours later, said that the waterway remains open. The latest exchange of fire was triggered by another Iranian attack on a commercial vessel in the Strait of Hormuz, forcing its crew to abandon ship after it caught fire.

“Following this incident… the Strait of Hormuz will be closed until further notice and until the end of American interventions in this region," Iran’s Revolutionary Guards said, according to state news agency IRNA. Will It Impact India’s Oil And Gas Imports? Diplomatic efforts to halt the fighting have continued after President Donald Trump declared the ceasefire over earlier this week. However, a quick end to hostilities remains uncertain, renewing concerns over the security of one of the world’s busiest energy shipping lanes. Despite the renewed tensions, India’s crude oil imports remain well insulated from any immediate disruption around the Strait of Hormuz. “Crude flows through the Strait had not fully recovered before the latest escalation. For India, however, it has largely been business as usual over the past 100 days, with refiners successfully managing supply through a diversified import portfolio," said Sumit Ritolia, who models refinery and oil markets at Kpler. Russia continues to account for a significant share of India’s crude imports, while supplies from Saudi Arabia and the United Arab Emirates, routed through bypass infrastructure, provide an additional layer of supply security. West African and Latin American grades have also helped diversify refinery feedstock, he said.

India’s crude oil imports rose to a record 4.93 million barrels per day (bpd) in June, driven by a sharp increase in purchases from Russia as refiners sought to strengthen supplies amid disruptions around the Strait of Hormuz. Russian crude imports climbed to around 2.7 million bpd, accounting for more than half of India’s total crude imports during the month and cementing Russia’s position as the country’s largest supplier by a wide margin. ‘Focus On LPG And LNG’ The initial weeks of the conflict had triggered panic buying of LPG cylinders in parts of India. It was only earlier this month that the Centre withdrew all sectoral restrictions on the supply of non-domestic packed LPG and restored supplies to pre-crisis levels. Ritolia cautioned that while crude cargoes capable of safely transiting the Strait of Hormuz are still expected to move, greater attention should now be paid to LPG and LNG markets, which have fewer short-term alternatives and remain more vulnerable to disruptions in Gulf supplies and shipping. “A prolonged period of instability could tighten availability, increase freight costs, and add pressure to regional prices again, as we have seen over the last few months," he said.