Amitabh Kant sounds grim warning for India amid Iran war-triggered fuel crisis— ‘Every $10 per barrel rise can…’

Former G20 Sherpa and ex-NITI Aayog chief Amitabh Kant on Thursday sounded a grim warning for India as crude oil prices continued to jump in the global market due to Tehran's closure of the Strait of Hormuz amid the escalating US-Iran conflict.

In a post on X, Amitabh Kant flagged the rising price of crude oil, saying that every $10 increase in the per-barrel rate can mean an addition of up to $14 billion to India's annual fuel import bill.

“Every $10 per barrel rise in crude prices can add $13–14B to India’s annual import bill, widen the current account deficit and pressure the rupee. Geopolitical shocks will keep testing our energy security,” he wrote in the post.

Oil prices surged more than 3% on Thursday, extending a rally as the escalating US-Israeli conflict with Iran raised fears of prolonged disruptions to vital Middle East oil and gas supplies.

Brent crude advanced $2.65, or 3.26%, to $83.99 per barrel by 0520 GMT, a fifth session of gains. US West Texas Intermediate crude rose $2.76, or 3.70%, to $77.42.

Iranian forces have struck oil tankers in or near the Strait of Hormuz. Explosions were reported near a tanker off Kuwait, according to the United Kingdom Maritime Trade Operations.

What's the solution?

According to Amitabh Kant, India can reach a solution by depending on its domestic supplies. It is not just adding clean energy capacity, but delivering renewable power at home through sources like solar-wind hybrids, electric vehicles and more.

“India’s next step isn’t just adding clean capacity but it’s delivering reliable clean power at home: high-PLF solar-wind hybrids, Electric vehicle momentum, modern grids, large-scale batteries & pumped hydro storage, and firm low-carbon baseload like nuclear. We need it all,” Kant said.

According to the former NITI Aayog chief, only having green energy capacity will not seal the deal, but delivery will.

“Not just capacity. Delivery. Energy independence = economic resilience,” Kant noted.

Crude oil prices in India

Crude oil prices on Thursday rose ₹185 to ₹7,055 per barrel in futures trade as participants widened their positions following a firm spot demand.

On the Multi Commodity Exchange, crude oil for April delivery traded higher by ₹185, or 2.69%, at ₹7,055 per barrel in 2,385 lots.

Analysts said the rise in bets by participants kept crude oil prices higher in the futures market.

How much crude stock does India have?

India has enough crude and fuel inventories to meet domestic demand of petrol, diesel and other fuels for up to six to eight weeks, according to a PTI report citing top government officials with knowledge of the matter.

About half of India's crude and LPG imports are brought in via the Strait of Hormuz, the key energy chokepoint that has been blocked by Iran amid its conflict with the US and Israel. As a result, insurers withdrew coverage, effectively halting tanker movements.

According to a senior oil ministry official, the government is monitoring the situation “on a daily and hourly basis”.

While the country has crude oil stocks to last 25 days and fuel to last a similar duration, contingency plans - including using stockpile in strategic petroleum reserves, commercial stocks, and diversified sourcing from the US, Russia, West Africa, and Latin America - will ensure continuity even if the crisis lasts longer.