Global crude oil prices surged to a four-year high on Thursday as the blockade of the Strait of Hormuz continued, raising concerns over global supply. Brent crude futures rose to $126.41 a barrel, the highest level since March 9, 2022, before easing to $114.4 per barrel at 9:13 PM IST. Meanwhile, WTI crude futures touched $110.93 earlier in the day before declining to around $104 per barrel.
India, which imports nearly 88% of its crude oil requirements, relies heavily on this route, accounting for around 40% of crude, 50% of LNG and 90% of LPG imports. Despite the price volatility, the government said domestic consumers are unlikely to face disruptions.
“The Indian government is trying to ensure that the domestic consumer doesn’t have to face any difficulty or faces the least inconvenience due to volatility in global crude prices,” said Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, during a press briefing.
The disruption follows stalled talks after Iran proposed reopening the Strait while deferring negotiations with the US on its nuclear programme. However, Donald Trump was reportedly “unhappy” with the proposal as it did not address concerns around Iran’s nuclear programme.
Separately, the government said it is identifying households with both LPG and PNG connections as part of efforts to curb misuse of subsidised fuel. Last month, the government barred households with piped natural gas (PNG) connections from retaining subsidised LPG connections by amending the LPG distribution rules.
Officials said over 43,000 PNG consumers have voluntarily surrendered LPG connections. While fuel supply remains normal, authorities have observed panic booking in some areas and urged consumers to avoid unnecessary purchases.
Those having PNG connections have also been barred from obtaining a domestic LPG connection. For government oil companies, the order prohibited them from "providing a domestic LPG connection, and/or supplying domestic LPG cylinder refills to a consumer who already owns a PNG connection". The move is aimed at prioritising LPG supplies for households that do not have access to piped gas.