Next week marks three months since the beginning of the ongoing war in West Asia and the near-halt of maritime traffic through the Strait of Hormuz. Thanks to US President Donald Trump’s jawboning of the petroleum market – he keeps talking about a deal with Iran to end the war – futures prices are still not very high. Many analysts, however, believe that a physical shortage of crude oil and other supplies will start manifesting in coming weeks as almost
Is the war's energy shock shifting gears in India now?Petroleum imports in April saw among the biggest month-on-month jump by value in dollar terms
The Centre for Monitoring Indian Economy (CMIE) database gives the dollar value of India’s petroleum and oil imports until April . Values for February, March and April are revealing: $12.9 billion, $12.2 billion and $18.6 billion respectively. In month-on-month terms, the 52.9% increase between March and April in import value is the third highest since April 1993, the earliest period for which CMIE has data. The first two instances, September 2021 and March 2025, also saw a large increase in import volumes. Data on import volume is only available until March 2026 and it shows a fall from 26.5 to 20.7 million tonnes between February and March 2026.
But import volumes are unlikely to have risen in April
How likely is a big jump in import volume of petroleum products in April ? Given the sharp disruption in global supplies, it seems less plausible. Wholesale Price Index (WPI) data on prices of crude and natural gas, buttress this prediction. Because of the adverse movement in the rupee-dollar exchange rate – it fell from 92.76 in March to 93.55 in April – some of the import value increase in dollar terms could just be on account of exchange rate rather than higher volumes. The crude oil and natural gas component of the WPI increased from 17% and 14.8% between March 2026 and April 2026. These numbers increased by 49.1% and 7.5% between February and March . A lot of the higher value of imports could be due to price increases rather than India buying significantly more volume.
Consumption data until April supports this theory
What we lack in import volume data for April, one can get from consumption data for the month. CMIE numbers, sourced from the petroleum ministry, show that consumption fell in April both sequentially (compared to March) and annually. While this is not the first-time consumption has fallen in annual terms, what it does rule out is a large increase in import volumes in April. To be sure, consumption trends are not uniform across different types of petroleum products.
Will demand destruction move to sectors outside LPG?
This is the most interesting question. So far, the heavy lifting of demand destruction has been done by LPG. Will this have to move to other commodities such as petrol and diesel if the war does not end and supplies do not resume? Are anecdotal reports of petrol pumps running dry signs that some of this is already happening? One will have to wait for more data and developments in West Asia to confirm or reject this decisively. At the moment, it is useful to end with a chart which shows how the last two months are almost the polar opposite of what the peak of the pandemic lockdown was. In April 2020, petrol and diesel consumption tanked while LPG consumption was stable. People were cooking but not moving because of the lockdown. In March and April 2026, LPG consumption has fallen by a large amount without a concomitant fall in petrol/diesel consumption. Can the Indian economy, if global supplies do not normalise, maintain this uneasy equilibrium? We will know the answer soon.
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