India’s crude oil imports averaged 4.4 million barrels per day between 1 and 26 April, marking a decline of about 15 per cent compared with February’s intake of 5.2 million barrels per day. This reduction highlights the strain on supplies as regional disruptions continue to weigh on energy flows.
Efforts by the United Arab Emirates and Saudi Arabia to bypass the Strait of Hormuz have provided some relief, ensuring that crude shipments to India remain steady despite the ongoing crisis.
Industry executives have suggested that the UAE’s exit from OPEC is unlikely to cause significant disruption to global oil markets, with alternative supply arrangements cushioning the impact.
The pressure on India’s energy imports has spilled over into currency markets. The rupee weakened to a near one‑month low against the dollar on Tuesday, driven by rising oil prices and importer hedging.
The currency touched 94.5750 per dollar during the trading session, its weakest level since 30 March, before closing at 94.54, down 0.4 per cent on the day. Losses were contained by dollar sales from state‑run banks, reportedly acting on behalf of the Reserve Bank of India, according to traders.
Asian currencies broadly came under pressure, with oil‑sensitive foreign exchange particularly hard hit as Brent crude futures climbed above $110 per barrel. The lack of progress in US‑Iran peace talks has kept energy markets unsettled.
A US official noted that President Donald Trump was dissatisfied with Iran’s latest proposal to resolve the two‑month war, dampening hopes for a breakthrough. The conflict has disrupted energy supplies, fuelled inflation, and caused thousands of deaths, adding to regional instability.
Equity markets also reflected the strain. Regional stocks fell on Tuesday, with MSCI’s gauge of Asian equities outside Japan down 0.7 per cent.
Analysts at Goldman Sachs highlighted that countries running current account deficits, including India, Indonesia, and the Philippines, are more vulnerable to trade deterioration.
This vulnerability may necessitate greater use of foreign exchange reserves, either alone or alongside tighter monetary policy, to manage the pressure. The rupee has already fallen 3.5 per cent since the onset of the Iran war, while the Chinese yuan has gained 0.3 per cent, underscoring differential exposures in the region.
The dollar was marginally stronger against a basket of peers, with investor focus shifting to upcoming central bank policy decisions in the euro zone, the United Kingdom, and Canada. Earlier in the day, the Bank of Japan left policy rates unchanged, though a hawkish split among policymakers pointed to the possibility of a rate hike in June.
Agencies
