New Delhi: Risks to India of an oil price spike are very high because of its steep dependence on global crude. Also, agreeing to have its choices circumscribed to the whims of the US, after US President Donald Trump’s executive order where a committee will oversee management of India’s crude suppliers, to ensure it does not buy Russian oil, means it is more vulnerable now.India imports almost 90% of its crude oil needs. About half of this, reaches India through the Strait of Hormuz, currently in the eye of a storm triggered by the US-Israel attack on Iran.The domestic LPG cylinder is to be costlier by Rs 60, commercial cylinder prices are up Rs 115, from today (March 7). This is the second increase after the last one of Rs 50 in April, last year. Major news agencies in India were citing “sources” just four days ago, as saying that prices are unlikely to go up in India.“Permission” from the US to be able to buy Russian oil for “30-days” is not only a blow to its prestige as a sovereign country but leaves its large economy very vulnerable. An already falling rupee and a widening trade deficit compound its challenges.Former CEO of NITI Aayog, Amitabh Kant has said, that every $10-per-barrel increase can mean an addition of up to $14 billion to India’s annual fuel import bill. The combined import fuel bill for India is “already $180 billion.”Bloomberg reports Bob McNally, president of Rapidan Energy Group and a former White House official as saying, “We see Brent [a global standard] reaching $100 a barrel and above in the coming days to weeks, once the market accepts that the Hormuz closure is a weeks-long event rather than a brief disruption.”ADB warning to Indian economyAsian Development Bank (ADB) has warned about how India’s limited crude oil reserves of about 100 million barrels — sufficient for only 40–45 days of consumption — leave the country particularly vulnerable to supply disruptions through the Strait of Hormuz amid the ongoing war in West Asia, reports Business Standard.“In Asia, reserve adequacy varies widely among major importers. Japan and the Republic of Korea, both International Energy Agency (IEA) members, meet the 90-day stock requirement and can join coordinated emergency releases. PRC (People’s Republic of China) and India, outside the IEA system, rely on their own stockpiles. PRC’s roughly 401 million barrels provide 3-4 months of cover, while India’s 100 million barrels give only 40-45 days, leaving it especially vulnerable to disruptions in the Strait of Hormuz,” ADB chief economist Albert Park said on X. 🧵1/8: The current conflict in the Middle East has reintroduced significant geopolitical risk into the global economic outlook. Our Macroeconomic Research Division at ADB has taken swift action to assess the potential implications for Asia.While Asia’s direct trade exposure to… pic.twitter.com/OZwin7LGE7— Albert Park (@ADBChiefEcon) March 5, 2026Park pointed to a series of attendant issues that India among other Asian economies could face, including, Energy prices and trade: With fuel subsidies reduced across much of Asia, global oil price changes now pass through more strongly to domestic inflation. Also, via “exchange rate and financial channels” making “geopolitical shocks typically trigger rising global risk aversion and safe-haven capital flows that strengthen the US dollar.”Also read: How India’s Alignment with US-Israel Will Devastate Its Interests in War Against IranThese effects are particularly pronounced for economies that are most dependent on oil imports, [like India]. “Shipping and global trade disruptions” too are likely to make life tougher. Also, the “spike in oil prices could negatively affect growth and consumer demand in advanced economies and thus reduce demand for goods produced in Asia in key markets such as Europe and the US, denting export growth.” The report also points to “aviation and logistics disruptions: Airspace closures across parts of the Middle East forced rerouting of long-haul flights and temporarily halted operations at major transit hubs.” As over time. “Gulf hubs had become central to Europe–Asia aviation, disruptions therefore affect passenger travel, tourism flows, and air cargo logistics. Air cargo plays a critical role in transporting high-value goods such as semiconductors and electronics. Increased flight times and fuel use raise logistics costs and may delay deliveries within tightly integrated supply chains. Unlike energy shocks, aviation disruptions transmit to economic activity almost immediately,” concludes Park.Moody’s Ratings: Structural exposure of India very highMoody’s Ratings has said that India’s structural exposure to oil price shock is very high. A prolonged dislocation in energy markets, may occur is the trouble in the Strait of Hormuz continues for long, as the Strait is a critical point in the journey for oil and other goods.“India stands out among large Asian economies that rely on West Asia crude. Costly energy imports would weaken the rupee, raise inflation, worsen the current account balance, and complicate monetary policy as well as fiscal management if they lead to expanded subsidies to help offset the economic shock,” it added.Blow to industries across GujaratCurrently, Gujarat’s industries are reeling from a gas supply crunch, with up to 50% cuts at several clusters, disrupting production and delaying orders.Gujarat Gas Ltd has notified stock exchanges of the crisis, citing severe re-gasified liquefied natural gas (R-LNG) shortages due to the West Asia conflict initiated by the attack on Iran by US and Israel last Saturday (February 28). The company has notified industrial customers of restricted daily gas supplies from Friday.