Global energy markets are on edge as traffic through the Strait of Hormuz slows to a near standstill, disrupting one of the world’s most critical oil corridors.

Maritime analytics firms Windward and Kpler report that while the strait has not been formally closed, crude flows have plunged dramatically. On March 1, just three tankers carrying 2.8 million barrels transited the narrow waterway — an 86% drop from the 2026 daily average of 19.8 million barrels. By early March 2, only a single small tanker and one cargo vessel were recorded moving through the main shipping lanes.

Meanwhile, an estimated 706 non-Iranian tankers are now backed up on either side of the passage. Of these, 334 are crude carriers, 109 are dirty product tankers, and 263 are clean product vessels. Another 26 tankers remain inside the Gulf without declared destinations, while hundreds more linger in the Gulf of Oman, effectively in a holding pattern.

A commander in Iran’s Revolutionary Guard Corps (IRGC) said on Monday that the strait was “closed” and that any vessel attempting to pass through the waterway would be set “ablaze.”

Oil Markets React

The disruption has rattled global markets. Brent crude jumped nearly 10%, hovering around $80 per barrel. European natural gas prices surged more than 40% following reported attacks on Saudi Arabia’s Ras Tanura refinery and a Qatari LNG facility, leading to temporary shutdowns.

Shipping insurers have tightened war-risk coverage for Gulf waters, and freight rates are climbing sharply. The added costs are expected to cascade into higher fuel prices worldwide if the standoff continues.

India Watches Closely

For India, one of the largest consumers of Gulf energy, the situation carries immediate implications. Officials in New Delhi are closely monitoring developments.

The Ministry of Petroleum and Natural Gas said it is tracking supplies and will take “all necessary steps” to ensure availability and affordability of petroleum products. Oil Minister Hardeep Puri reviewed stock levels amid growing uncertainty.

Industry estimates suggest India exports roughly one-third of its petrol and about a quarter of its diesel output. Liquefied Petroleum Gas (LPG) remains the most vulnerable segment: India imports nearly 80–85% of its LPG requirements, much of it routed through Hormuz. Current estimates indicate stocks could cover less than two weeks of consumption if fresh shipments halt.

State refiners — Indian Oil Corporation, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited — have reportedly increased LPG production at select refineries as a precaution.

India’s combined crude and product reserves — stored in strategic caverns, refineries, ports, and floating storage — are estimated to cover about 74 days of demand. Within that, dedicated crude reserves account for roughly 17–18 days, refined fuels for about 20–21 days, and LNG storage for approximately 10–12 days.

A Prolonged Crisis?

US President Donald Trump has warned that the broader West Asia conflict could last “weeks, not days,” raising the stakes for energy-importing nations.

If tanker traffic through Hormuz remains frozen for an extended period, refiners in Asia and Europe may be forced to rely more heavily on supplies from the US Gulf, West Africa, Brazil, and Russia. Delivery schedules could slip, premiums could rise further, and governments may face difficult decisions on exports, subsidies, and demand management.

For now, the world’s most important oil artery remains technically open — but effectively gridlocked — leaving markets tense and energy-dependent economies bracing for what comes next.