Discussions between Iranian President Masoud and Indian Prime Minister Modi are successful; the oil tanker will be brought in.

Amidst escalating conflicts in the West Asian region, the 'Shenlong Suezmax' crude oil tanker, flying the Liberian flag, successfully navigated the high-risk Strait of Hormuz and arrived at Mumbai Port, India, on March 11, 2026.

Hours after Tehran's new supreme leader pledged to continuously close the Strait of Hormuz, Indian Prime Minister Narendra Modi made a phone call to Iranian President Masoud Pezeshkian, taking urgent steps to mitigate energy supply risks. This was Modi's first call to Iran since the war began, and India, the world's third-largest oil importer and second-largest liquefied petroleum gas (LPG) consumer, is currently facing a severe crisis amidst rising energy costs and supply shortages.

The Prime Minister, sharing details of his discussion with the Iranian leader, noted on his official X (formerly Twitter) account that the safety of Indian nationals, as well as the uninterrupted transportation of energy and goods, is India's top priority.

According to Citi, approximately 50% of India's crude oil requirements and a large portion of LPG, a primary fuel used for commercial and domestic purposes, are imported through the Strait of Hormuz. Government officials stated at a press conference that while there are adequate stocks at fuel stations, consumers are exhibiting panic-buying behavior for LPG.

In light of this situation, to prioritize domestic LPG supply, the government has instructed pollution control boards to allow the restaurant and hotel sector to use alternative fuels such as kerosene, biomass, and coal. The Indian National Restaurant Association told CNBC that nearly 330 million households and over 3 million businesses in India use LPG cylinders, and due to the current shortage, many restaurants have been forced to close or limit their menus.

Nikhil Bhandari of Goldman Sachs states that India needs more oil and gas, and being heavily reliant on the Strait of Hormuz, India has very low reserves compared to other North Asian markets.

Citi forecasts that the 4% inflation for the fiscal year ending March 2027 is at risk of rising by 50 to 75 basis points. The institution further indicates that if oil prices remain between $90 and $100 per barrel, the price of fuel per liter could increase by 5 to 10 rupees, which alone would contribute to a 50 basis point rise in inflation.

Meanwhile, global brokerage firm Nomura has raised India's consumer inflation forecast from 3.8% to 4.5%, considering the risk of rising restaurant prices due to commercial LPG shortages. Nomura also states that if supply chain disruptions persist for more than a month, several sources of inflationary pressures could emerge.

Although the government prioritizes supply to consumers, domestic access has also been restricted due to limitations imposed since the war began. As a result, urban consumers now have to wait 25 days instead of the previous 21 days to place an LPG order, and for rural households, this has extended to 45 days.

Despite a 60 rupee (approximately 6.5%) increase in the price of a domestic gas cylinder amidst supply restrictions, experts point out that the government's ability to fully pass on rising fuel costs to consumers is limited due to ongoing election campaigns in five major states.

With traders predicting oil prices to remain high for an extended period, the Indian Rupee depreciated to a record low of 92.48 against the US Dollar by Friday. Radhika Rao, Senior Economist at DBS Bank in Singapore, states that if oil prices cross the $100 mark, India's current account deficit could widen by 70 basis points. India's current account deficit was 1.3% of GDP by the end of December 2025, and a further widening would directly impact currency depreciation.