Iran War Pushes India's Crude Oil Basket To $85/barrel, A 19-month High

India's crude oil import benchmark has surged to its highest level in 19 months as the escalating Iran war rattles global energy markets and pushes up crude prices worldwide.

Data from the Petroleum Planning and Analysis Cell (PPAC) under the petroleum ministry showed the Indian basket of crude oil touched $85.24 per barrel on March 4, the highest level since July 2024. The benchmark had averaged $69.01 per barrel in February, underscoring the sharp jump in prices within a short span.

Government officials, however, said there is no immediate risk of fuel shortages in the country. India currently has adequate stocks of petrol, diesel, LPG and natural gas, and authorities are closely monitoring the situation while reviewing the energy scenario multiple times a day.

The surge in India's crude basket reflects the rally in global oil markets after the conflict involving the United States, Israel and Iran raised fears of disruptions to supplies from the Middle East.

International benchmark Brent crude climbed above $84 per barrel, also its highest level in nearly 19 months, as the widening conflict has slowed oil shipments from the Gulf.

Much of the concern centres on the Strait of Hormuz, one of the world's most crucial oil transit routes through which nearly a fifth of global crude supply passes. Tanker traffic through the strait has slowed sharply amid rising security risks, with several ships stranded, diverted or awaiting instructions.

For India, the world's third-largest oil importer, sustained high crude prices could eventually increase the country's oil import bill. India imports around 85% of its crude oil requirements, leaving the economy exposed to swings in global energy prices. Moreover, 40% of India's oil imports come from the Strait of Hormuz route. Higher crude prices can also feed into transportation and logistics costs and eventually influence inflation if the trend persists.

The Indian crude basket, used by the government to track the average price of oil imported by domestic refiners, is a weighted mix of Dubai and Oman sour crude along with Brent sweet crude.