The US and Iran have signed a Memorandum of Understanding (MoU) of the much-awaited peace deal, upon which the controversial Strait of Hormuz is effectively opened. For more than the last three months, the narrow waterway was closed, choking flow of global oil which is the backbone of the global economy. Thankfully, the narrow chokepoint is now open and oil is flowing freely through it. The reopening of the Strait of Hormuz marks the end of nearly four months of disruption that had sent crude oil prices soaring and heightened concerns over global energy supplies. What will be impact on Asia India? The impact of the reopening is being felt well beyond West Asia. A reopened route would allow exports to Europe and Asia to flow again without the costly detours that have pushed up freight and transport costs in recent months. For India, one of the world’s largest energy importers, the development offers significant relief, but experts caution that the underlying vulnerabilities exposed by the crisis are far from resolved. A full reopening is expected to bring relief on both counts easing the bottleneck for Gulf producers while letting stranded barrels flow back to buyers worldwide including India. Lets see when can the government of India roll back the hike in petrol and diesel prices undertaken due to transport disruptions caused during the Iran war. What govt of India says? The Petroleum Ministry said retail fuel price decisions will continue to be taken in line with the evolving global crude oil situation, as international oil prices have started easing after surging to as high as $120 per barrel during the recent West Asia crisis. As you know, the price of crude went up to USD 120 per barrel. Now it is coming down. The government is seized of the matter and appropriate decisions regarding retail prices will continue to be taken in line with the evolving international situation. – Joint Secretary in the Ministry of Petroleum and Natural Gas Sujata Sharma By how much govt hiked fuel prices in India during Iran war? When will govt reduce petrol diesel prices in India? International prices have come down. So fuel prices should also come down. -Devinder Sharma, economist India’s Petrol Price Not In Sync With Global Oil Prices While, a government official on condition of anonymity, said that a reduction in retail petrol and diesel prices may not happen immediately despite the recent correction in global crude prices. He attributed following two reasons behind why government woun’t reduce fuel prices: a. Current crude prices are still elevated compared to pre-conflict levels Currently, the international standard, Brent crude oil prices hover around $80 per barrel. Various analysts have pegged the global oil benchmark prices to remain around this level only for the rest of 2026. Before, the Iran war had begun, Brent traded at $70 per barrel. According to the official, a price cut is more likely only if crude prices remain sustainably below pre-war levels (ie below $70 a barrel) for some time. b. OMCs will first make up for past losses then look to cut prices According to the government official, the Indian oil marketing companies are likely to have incurred significant margin pressures during the period of higher crude prices over the last three months. They would probably prefer to rebuild their marketing margins before passing on the benefit to consumers. OMCs will first look to recover past under-realizations. SK Md Azharuddin, Economist at the National Institute of Public Finance and Policy (NIPFP) said to the news agency ANI, that decline in global crude oil prices after easing tensions in West Asia may not immediately lead to lower fuel prices in India. I am not sure whether the government will immediately reduce fuel prices because OMCs are already under pressure. Lower crude prices would give OMCs some breathing space. In the medium term, the government may decide to reduce prices as well, but it is a difficult choice whether to pass on the benefits immediately or allow OMCs some relief. -SK Md Azharuddin, economist, NIPFP to ANI Lower oil prices will boost rupee benefit Indian economy: NIPFP Azharuddin added that the peace deal in the region will “definitely” benefit India. He also said that India is a major importer of crude oil, and lower-priced crude imports would help the economy. It could also help strengthen the rupee in the near future. Oil price forecast? US-based investment bank Goldman Sachs pegs Brent crude oil prices at $80 per barrel for the fourth quarter of 2026. It also forecasted average Brent prices of $75 a barrel for 2027. Manav Modi, Commodities Analyst at Motilal Oswal Financial Services also said to ANI that he expects crude prices to stay capped near $80 if US-Iran truce holds and Hormuz fully reopens. Impact of US-Iran deal on global economies The investment bank said that the deal will make way for an increment of global exports of crude oil. It assumes that Persian Gulf oil exports will return to pre-war levels by the end of July. “For India, the benefits extend beyond lower energy price volatility. Greater regional stability would improve shipping confidence, reduce insurance and logistics costs, strengthen connectivity initiatives such as IMEC ( India-Middle East-Europe Economic Corridor), and create a more predictable environment for trade with the Gulf and the wider Middle East,” Chintan Research Foundation (CRF) President Shishir Priyadarshi said to PTI. Iran will produce more oil According to Goldman Sachs, Iran will be able to hike oil production if sanctions are eased. Inflation to reduce: Analysts also believe that the US-Iran truce has reduced concerns over oil supply disruptions and inflation. IMF had made global inflation projections of 5.4% in its April 2026 meeting. While, the international organisation had predicted GDP growth of 2.5% to 3.1% for 2026. Deal paves way for favourable trade and investment climate Priyadarshi said to PTI that the deal will significantly improve the trade and investment climate across West Asia. How much oil India imports via Hormuz Strait? For India, the Gulf countries are among its most important energy suppliers. India imports nearly 85-90% of its crude oil requirements, with around half of those supplies transiting the Strait of Hormuz India’s 90% LPG imports come through the strait? When it comes to Liquefied Petroleum Gas (LPG), the most widely used cooking gas in the country, India imports around 60% of its total demand, with roughly 90% of those supplies passing through the Strait. What about natural gas? India also imports roughly half of its natural gas requirements, with nearly two-thirds of that arriving from Qatar and the UAE. Post navigation Nita Ambani says Reliance will set up private university:Academy to have 7 world-class schools with a focus on AI, adds the philanthropist How should freelancers manage their money?:How much should they set aside for taxes
