India Holds Fuel Prices Amid Iran War, OMC Losses Surge

Despite global hikes triggered by the Iran war, India fuel prices remain unchanged, with oil firms absorbing mounting daily losses.

India has, so far, held the line on retail fuel prices even as global markets reel under the impact of the ongoing Iran war, a move that has insulated consumers but triggered mounting financial stress for state-run oil companies.

Petrol and diesel rates have remained unchanged across the country since late February 2026, when the conflict began disrupting key crude supply routes, particularly through the Strait of Hormuz. The decision stands in sharp contrast to trends seen worldwide, where governments have largely passed on rising costs to consumers.

Global prices surge

Across international markets, crude oil prices have seen sharp fluctuations over the past two months. Brent crude briefly climbed to around $126 per barrel amid supply concerns linked to shipping disruptions.

Data from global fuel trackers indicate that more than 120 countries have raised retail fuel prices since the conflict escalated. In parts of South and Southeast Asia, price increases have ranged between 30 and 50 per cent. North America has recorded hikes of roughly 30 per cent, while Europe has seen increases of about 20 per cent.

Closer home, countries such as Pakistan, Bangladesh and Sri Lanka have reported record fuel price revisions, reflecting the broader global trend.

India bucks the trend

India’s approach has been markedly different. Retail fuel prices have effectively remained at levels last revised in May 2022, offering relief to households and businesses already dealing with broader economic pressures.

Officials say the decision is aimed at shielding consumers from volatility in global energy markets. Fuel costs in India have a cascading impact on transportation, logistics and food prices, making them a politically and economically sensitive issue.

“Protecting citizens from sudden inflationary shocks remains a priority,” a government source familiar with the policy thinking said, adding that alternative measures were being used to manage the fiscal burden.

Mounting OMC losses

However, the stability has come at a steep cost. State-owned oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — are bearing significant under-recoveries.

Initial government estimates suggested that these companies were incurring combined losses of around ₹2,400 crore per day, as they continued to sell fuel below cost. At one stage, under-recoveries were pegged at approximately ₹26 per litre on petrol and as high as ₹81.90 per litre on diesel.

While subsequent excise duty adjustments have offered some relief, industry insiders say the financial strain remains considerable.

Government’s balancing act

The Centre appears to be walking a tightrope between fiscal prudence and inflation control. Petroleum and Natural Gas Minister Hardeep Singh Puri had earlier indicated that the government was consciously absorbing part of the global price shock rather than passing it on to consumers.

According to officials, reduced excise collections and indirect support to oil firms are part of this strategy. The broader objective is to prevent a ripple effect on essential commodities, especially in rural and semi-urban markets where fuel-driven inflation tends to hit hardest.

Inflation concerns linger

Economists point out that a sudden increase in fuel prices could push up wholesale and retail inflation, complicating macroeconomic management. Diesel, in particular, plays a crucial role in transporting agricultural produce and manufactured goods.

“Any sharp revision would have a near-immediate impact on supply chains,” said an analyst tracking energy markets, noting that India’s consumption patterns make it more vulnerable to fuel-linked inflation than some developed economies.

Possibility of revision

Despite the current freeze, the government has not ruled out a future price revision. Sources indicate that if global crude prices remain elevated for an extended period, adjustments may become inevitable.

As of now, petrol in Delhi is priced at ₹94.72 per litre, while diesel stands at ₹87.62. These rates have held steady even as international benchmarks remain volatile.

For now, India fuel prices continue to reflect a policy choice prioritising consumer stability over short-term fiscal comfort. How long this balance can be sustained, however, remains an open question.

US Threatens Strait of Hormuz Blockade; Oil Tops $100

Iran has branded the US plan for a naval blockade of the Strait of Hormuz as “illegal piracy”, even as crude oil prices surged past $100 a barrel on Monday amid mounting tensions following failed peace talks.

CENTCOM Sets Blockade Timeline  

US Central Command announced it will begin enforcing a blockade of all maritime traffic entering or leaving Iranian ports from 7:30 pm IST on April 13. The move follows President Donald Trump’s directive after weekend negotiations in Pakistan collapsed without a lasting ceasefire.

Iran Labels Move as Piracy  

Iran’s military central command, Khatam Al-Anbiya, issued a sharp rebuke. “The restrictions imposed by criminal America on maritime navigation and transit in international waters are illegal and constitute an example of piracy,” the statement read on state television. It warned that if Iranian ports face any threat, “no port in the Persian Gulf and the Arabian Sea will be safe.”

Blockade Targets Iranian Ports Only  

CENTCOM clarified that the restrictions will apply impartially to vessels of all nations heading to or from Iranian ports and coastal areas in the Arabian Gulf and Gulf of Oman. However, freedom of navigation for ships transiting the Strait of Hormuz to and from non-Iranian ports will remain unaffected.

Crude Oil Prices Spike Sharply  

Oil markets reacted instantly to the announcement. Brent crude futures jumped 7.3 per cent to $102.16 a barrel by early trading, while US West Texas Intermediate surged 8.4 per cent to $104.69 a barrel. The sharp rise reversed earlier declines and added fresh pressure on global energy costs.

Failed Talks Trigger Fresh Escalation  

The blockade decision came hours after US-Iran talks in Pakistan ended without agreement. Trump indicated he was unconcerned about Tehran returning to the table, saying, “I don’t care if they come back or not. If they don’t come back, I’m fine.” Iranian Foreign Minister Abbas Araghchi said Tehran had approached the discussions in good faith but faced “maximalist demands”.

India Feels Immediate Market Jolt  

The developments sent ripples through Indian markets. The Sensex crashed over 1,600 points and the Nifty fell nearly 500 points in early trade on Monday, reflecting investor fears over higher imported crude costs and inflation risks for the world’s third-largest oil importer. Shipping activity through the Strait of Hormuz had already halted, according to maritime tracking reports.

What Lies Ahead for Region  

With the US considering additional measures including possible limited strikes, the coming hours will test whether the blockade remains strictly limited to Iranian ports or escalates further. Tehran has vowed to defend its sovereignty while maintaining that the Strait remains open under its regulations. For now, the world watches closely as this latest chapter in the US-Iran standoff unfolds, with major implications for energy security and regional stability.

Missiles overhead, mines below: How Indian LPG tanker survived Hormuz blockade

Indian-flagged vessel Pine Gas navigates high-risk ‘Larak route’ under Navy protection as regional conflict traps 3,200 ships in the Strait of Hormuz.

In a high-stakes maritime breakout, the Indian-flagged LPG tanker Pine Gas has successfully navigated the volatile Strait of Hormuz, escaping a regional blockade that has crippled global energy lanes. The vessel, carrying critical fuel supplies for India, arrived in safe waters this week after a harrowing three-week ordeal marked by daily aerial combat and the threat of sea mines.

The transit comes at a time when the region is reeling from the February 28 joint strikes by the US and Israel on Iran. According to latest news today, the Pine Gas was forced to adopt an unconventional "northern route" past Larak Island to avoid heavily mined international shipping lanes.

Crew witnessed daily combat

The ship’s 27-member Indian crew reported a "war-zone atmosphere" during their time in the Persian Gulf. Chief Officer Sohan Lal confirmed that the crew witnessed missiles and drones flying overhead on a daily basis as regional tensions escalated.

The vessel had loaded its cargo at the UAE’s Ruwais port on February 28, just as hostilities broke out. While the journey to India typically takes a week, the Pine Gas remained stranded for nearly 21 days before receiving clearance to move.

Unusual route via Larak

In a departure from standard maritime protocols, Iran’s Islamic Revolutionary Guard Corps (IRGC) directed the tanker to navigate a narrow channel north of Larak Island. Sources indicated that the IRGC recommended this path because the primary Hormuz passage was reportedly littered with sea mines.

Crucially, the crew noted that the IRGC did not board the vessel, nor was any transit fee charged. This bypass was essential for the vessel's survival as standard routes became impassable for commercial traffic.

Operation Sankalp in action

The Indian Navy played a pivotal role in the rescue, providing a 20-hour continuous escort from the Gulf of Oman to the Arabian Sea. This mission falls under the long-standing Operation Sankalp, which secures sea lanes for Indian-flagged vessels.

Government updates confirmed that the Navy has intensified its presence in the region. Apart from Pine Gas, three other vessels—Shivalik, Nanda Devi, and Jag Laadki—have been safely brought back to Indian waters under naval protection.

Maritime emergency hits trade

The International Maritime Organization (IMO) has officially declared the situation a "maritime emergency." Reports suggest approximately 3,200 vessels remain trapped within the Persian Gulf, unable to navigate the 33-kilometre-wide chokepoint.

The disruption is a significant blow to global energy stability. About 20% of the world’s oil and gas trade passes through the Strait, and for India, the stakes are even higher given its heavy reliance on Gulf suppliers.

India’s energy security risk

The crisis highlights a growing vulnerability in India’s energy map. In the 2024-25 period, 92% of India’s LPG imports originated from four Gulf nations: UAE, Qatar, Saudi Arabia, and Kuwait.

With the UAE now supplying over 40% of India's LPG, any prolonged closure of the Hormuz Strait poses a direct threat to domestic supply chains. This English News Portal India report notes that while demand has surged due to schemes like Ujjwala Yojana, domestic production remains stagnant.

Rising domestic gas demand

Data shows India imported 20.67 million tonnes of LPG in 2024-25, a 40% jump from five years ago. Meanwhile, domestic production has hovered around 12.8 million tonnes, failing to keep pace with the 330 million active gas connections across the country.

As the conflict persists, the Ministry of External Affairs and the Indian Navy remain on high alert. This public interest story will continue to evolve as officials monitor the remaining Indian vessels still awaiting safe passage through the world’s most dangerous waterway.

Covid-Like Call to Action

Prime Minister Narendra Modi on Monday called for a nationwide sense of readiness akin to the Covid-19 pandemic, warning that the ongoing military conflict in West Asia involving Iran, the United States, and Israel is likely to trigger long-term global disruptions. Addressing the Lok Sabha, the Prime Minister emphasized the need for national unity and patience as the country braces for potential economic and security challenges.

PM Modi Addresses Lok Sabha

Speaking in the Lower House of Parliament on March 23, PM Modi stated that the effects of the current global turmoil would not be short-lived. “The effects of these difficult circumstances around the world due to this ongoing conflict are expected to last a long time. Therefore, we have to stay ready, we have to stay united,” the Prime Minister said.

He drew a parallel to the country’s collective response during the Covid-19 pandemic, asserting that the same spirit of perseverance will be required to navigate the upcoming challenges.

Energy Security at Risk

Officials indicate that the primary concern driving the government’s alertness is the potential disruption to global energy supply chains. The conflict in West Asia has already introduced volatility in crude oil prices, raising concerns about inflationary pressures and India’s import依赖性.

With the region being a critical source of energy for the Indian economy, the government is closely monitoring the situation to ensure adequate supply and price stability. The Prime Minister’s remarks signal a proactive approach to shield the domestic market from external shocks.

Security Agencies on High Alert

In a significant statement focused on national security, PM Modi revealed that all law enforcement and security agencies have been placed on high alert. He warned that during such crises, certain anti-national elements may attempt to exploit the instability.

“When such crisis arise, some elements also try to take undue advantage. Therefore, all agencies responsible for maintaining law and order have been put on alert,” he said. The Prime Minister specifically mentioned the bolstering of coastal security, border surveillance, cyber security frameworks, and the protection of strategic installations across the country.

Unity as a National Strength

Emphasizing a whole-of-nation approach, PM Modi urged citizens to move forward collectively. “If every government and every citizen of the country moves together, then we can overcome every challenge,” he stated. The remarks were aimed at preempting panic while signaling that the administration is taking pre-emptive measures to ensure the nation’s resilience.

This call for unity mirrors the administrative cohesion seen during the lockdowns of 2020, though officials clarified that no immediate lockdown is being considered. Instead, the focus remains on supply chain continuity and law and order.

Global Context and Stakes

The Prime Minister’s address comes against the backdrop of escalating military exchanges between Israel and the US on one side and Iran on the other, which has raised fears of a wider regional war. Global markets have reacted with caution, and diplomatic channels are stretched thin.

For India, which maintains strategic relations with all parties involved, the situation presents a complex diplomatic challenge. However, the government’s immediate priority, as per the Prime Minister’s speech, is to insulate the domestic population from the geopolitical fallout.

 The Road Ahead

With the conflict showing no signs of de-escalation, the Centre has begun coordinating with state governments to ensure preparedness. Ministries related to petroleum, finance, and home affairs are reportedly working on contingency plans to handle potential price shocks and supply shortages.

As the situation in West Asia remains fluid, the government’s message is clear: readiness, patience, and unity will define India’s response. The coming weeks will likely see increased vigilance across coastal and border regions, alongside calibrated diplomatic efforts to safeguard national interests.

Analysts highlight Gulf countries restraint in the Middle East war as leaders defend key energy infrastructure without full retaliation, preventing the regional crisis from spiralling into a wider global shock.

Energy Infrastructure Under Attack  

Iran has struck multiple strategic facilities across the Gulf, including Mina al-Ahmadi and Mina Abdullah in Kuwait as well as Ras Laffan in Qatar. These sites form the backbone of crude oil and natural gas production and exports in the region.

Calculated Survival Strategy  

Gulf nations have responded with defensive measures, intercepting incoming drones and missiles. Yet they have stopped short of offensive action or joining the US-Israel alliance. Officials describe this as a well-calculated move to limit further damage to their economies already strained by sanctions and supply disruptions.

Sectarian Tensions Loom Large  

The region remains predominantly Muslim, with deep Shia-Sunni divides. Iran’s Shia influence contrasts with Sunni-majority Gulf states such as Saudi Arabia. Any full-scale retaliation risks transforming the current conflict into a broader Islamist civil war, a scenario Saudi Arabia has explicitly warned against by noting its patience is now limited.

Heavy Reliance on US Forces  

While Gulf countries possess advanced defensive systems like Patriot missiles supplied by the United States, their offensive capabilities depend heavily on American military bases in Kuwait, Qatar and other locations. Analysts note that full war participation could expose them if Washington chooses to step back, leaving them vulnerable against Iran’s established offensive network through the IRGC.

Economic and Inflation Risks  

Disruptions in the Strait of Hormuz have already pushed up global oil and natural gas prices. This mirrors the energy shock from the Russia-Ukraine war and threatens fresh inflationary pressures worldwide. The United States, a major producer and consumer of crude, is particularly wary as domestic cost-of-living concerns persist despite earlier promises to control inflation.

Investment Hub at Risk  

Over the past decade, Gulf states have successfully diversified beyond energy, attracting billions in foreign direct investment. Projects in AI, data centres and complex engineering have tripled since 2018. A full-front war would shatter this image of a safe investment zone and force companies to redirect capital elsewhere, potentially benefiting alternative destinations.

Refugee Crisis Fears  

Escalation could trigger large-scale outward movement from Iran and surrounding areas, repeating the humanitarian crises seen earlier in Iraq, Syria and Libya. Gulf leaders fear the resulting trafficking, militia activity and strain on domestic stability would prove difficult to manage.

Limits of Calculated Restraint  

Diplomacy remains the preferred route so far. However, experts caution that restraint is not indefinite. Direct strikes on desalination plants, which supply water to millions, or attacks on ruling families could force a shift to offensive action. Complete closure of the Strait of Hormuz would also collapse the economic lifeline of these nations.

The ongoing crisis continues to draw global attention as a public interest story with far-reaching implications for energy security. India News Update platforms and international observers watch closely for any policy shifts that could affect National and International News flows. Government Updates from the region stress the need for de-escalation at the negotiating table.

As developments unfold minute by minute, Gulf countries restraint in the Middle East war reflects a clear priority: protecting livelihoods, economic diversification and regional stability over immediate retaliation. Whether this approach holds or gives way to stronger action depends on how the conflict evolves in the coming days.

In a surprise move to steady global energy markets, the Trump administration has issued a 30-day exemption allowing every country to buy Russian crude oil and petroleum products already loaded on ships. The US Treasury Department announced the licence on Thursday, targeting only oil that left Russian ports before 12:01 am on March 12. Deliveries are permitted until April 11.  

This temporary US Russian oil exemption comes as crude oil prices crossed $101 per barrel and Iran warned that Brent crude could spike to $200 amid the ongoing America-Israel-Iran conflict.  

Why the Sudden Policy Shift?  

US Treasury Secretary Scott Bessent explained the decision on X (formerly Twitter): “President Trump wants stability in the global energy market.” He stressed that the exemption will not give Russia any major new revenue because most of its earnings come from extraction taxes, not from oil already at sea.  

Three clear reasons drove the change:  

- The Strait of Hormuz — the world’s most critical oil chokepoint carrying 20% of global supply — is now completely blocked due to the Middle East war.  

- Indian imports, which rely on this route for nearly 50% of crude and 54% of LNG, face serious disruption.  

- Fears of $200 oil forced quick action to release stranded Russian tankers waiting near Asian ports.  

Background: From 2022 Ban to Today’s Crisis  

Western nations banned Russian oil imports in 2022 after the Ukraine invasion to cut war funding. Two years later, fresh attacks on Middle East energy infrastructure have pushed prices up more than 9% in days. Even record releases from strategic reserves could not calm markets.  

Impact on India and Global Supply  

Indian officials made it clear they never needed US permission to buy Russian oil. However, the new exemption will make logistics smoother for tankers already en route. Energy experts say increased supply from these stranded cargoes should help pull crude oil prices down in the coming weeks.  

What This Means for You  

For everyday consumers, lower oil prices could soon translate into cheaper petrol and diesel at pumps. Investors are watching Brent futures closely — analysts predict a short-term cooling effect until April 11. After that, the exemption ends and markets will reassess.  

The 167-km-long Strait of Hormuz remains the biggest uncertainty. Until shipping resumes safely, the Trump oil policy move acts as a vital bridge to prevent further chaos.  

This latest US Russian oil exemption shows how quickly geopolitics and energy security are linked. As the Middle East conflict continues, expect more such pragmatic steps to protect global consumers from extreme crude oil prices. Stay tuned for updates as the April 11 deadline approaches.