India’s crude oil import volumes crashed in the first two weeks of March 2026, with loadings from Saudi Arabia, Iraq, and the UAE — the country’s three largest crude suppliers — severely disrupted following the Strait of Hormuz closure. The data, drawn from real-time tanker tracking, confirms what energy analysts had feared: the Hormuz blockage is beginning to bite hard into India’s energy supply chain, with cascading effects on the trade deficit, inflation, and industrial production.
Petroleum Trade Deficit Could Widen by $4 Billion in March
A broking note circulated among energy traders estimates that India’s trade deficit on crude oil and petroleum products alone could widen by more than USD 4 billion month-on-month in March 2026 — a significant deterioration that will weigh heavily on India’s overall current account position. The widening reflects both lower import volumes (reducing the offset from domestic refining margins) and sharply higher unit prices driven by Brent crude trading above USD 108 per barrel.
India’s overall merchandise trade deficit had already widened to USD 27.1 billion in February 2026, up from USD 14.42 billion a year earlier, partly driven by earlier supply disruptions. A further widening in March would put the current account deficit under substantial pressure and could accelerate rupee depreciation, which has already fallen to approximately 92.33 against the US dollar.
Qatar LNG Hit: 47% of India’s Gas Supply at Risk
A separate and underreported dimension of the crisis concerns India’s LNG supply from Qatar. Iranian military operations in the region have damaged Qatar’s LNG export infrastructure, impairing approximately 17 per cent of the country’s export capacity. This is particularly significant for India, which sources around 47 per cent of its imported LNG from Qatar. Any sustained reduction in Qatari LNG output would have direct implications for India’s gas-fired power generation, petrochemical feedstock supply, and city gas distribution networks.
Strategic Reserves Below IEA Recommended Threshold
India’s national crude oil reserves currently stand at approximately 74 days of consumption cover — below the International Energy Agency’s (IEA) recommended threshold of 90 days for major importers. While not immediately critical, the reserve gap leaves India with limited buffer if the Hormuz disruption extends beyond April. The Petroleum Ministry has reportedly directed the Strategic Petroleum Reserves programme to assess options for additional stockpiling through alternative sources, including West African and US crude.
