Strait of Hormuz crisis: India paid $22B extra for fuels
What's the story
A study by the Centre for Research on Energy and Clean Air (CREA), has revealed that India was among top 20 countries with highest gross additional costs for fuel during the Strait of Hormuz crisis. The report said that India suffered an additional cost of $22 billion in the six months after attacks on Iran. The study also found that fossil fuel importers paid $330 billion in extra costs for seaborne crude oil, oil products, and LNG during this period.
Price surge
CREA report on US-Iran conflict impact
The CREA study highlighted the "largest sustained oil price shock" since the 1990 Gulf War, caused by US-Iran conflict.
It found that during first six months of this conflict, Asian LNG prices were 75% above pre-war expectations, European LNG prices were 60% higher, diesel up by 59%, and crude oil was up by 35%.
The report compared actual fossil fuel prices over six months with monthly expected prices in the 12 days before US and Israel's first strikes on Iran.
Cost comparison
EU, China, India were top 3 areas
The CREA report found that the EU incurred the highest gross extra costs at $78 billion, followed by China at $35 billion, and India at $22 billion.
This means that India's additional cost over the six months after Iran's strikes was $22 billion more than what pre-war futures curves had anticipated.
For all fuels combined, India's net extra cost stood at $14.4 billion or 0.38% of its GDP, equivalent to about 1.4 days' worth of national income.
Import impact
Crude and LPG imports
Between March and August 2026, China paid a net of $31.3 billion for crude oil while India paid $20.5 billion, together accounting for 40% of the total crude cost ($131.2 billion).
For LPG imports over six months, India spent about $4.7 billion with an estimated additional cost of $1.1 billion due to the price shock.
This was on volumes that fell to half in March before recovering by June 2026, according to the report.
Crisis mitigation
Clean power generation saved importing countries billions
In the first five months of the crisis, clean power generation added since 2020 saved importing countries an estimated $36 billion in avoided coal, gas, and oil imports.
This included $22 billion in gas imports, $10 billion in coal imports, and $5 billion in oil imports.
The CREA report said that Brazil avoided 35%, Lithuania 25%, Denmark 24%, and Sweden 19% of their total national import value through these measures.