Archive · 30 Aug 2026
India Paid $22 Billion After Strait Of Hormuz Shock
A war involving the United States and Iran made fuel shipments through the Strait of Hormuz harder and more expensive.
Many countries had to pay much more for oil, gas and other fuels than markets had predicted.
Together, importers paid about $330 billion extra over six months.
India paid $22 billion extra before accounting for offsets and other adjustments.
Its net extra cost was $14.4 billion, which was a small but significant share of its economy.
India’s LPG imports dropped sharply in March because some shipments were disrupted.
The United States supplied a larger share of India’s LPG as Gulf supplies fell.
The study also said that new clean-energy projects helped countries avoid buying about $36 billion in fossil fuels.
Fossil-fuel importers paid an estimated $330 billion more than expected during the six months after the February 2026 US-Israel strikes against Iran.
The European Union incurred the largest gross extra cost at $78 billion, followed by China at $35 billion and India at $22 billion.
India’s net additional cost across all fuels was $14.4 billion, equal to 0.38% of its GDP or about 1.4 days of national income.
India’s LPG imports fell 49% in March, while the United States increased its share of India’s LPG supply from 8% in February to 32% in April.
Clean-power generation added since 2020 avoided an estimated $36 billion in fossil-fuel imports during the first five months of the crisis.
- Who
- Fossil-fuel-importing countries, including India, China and European Union members, were affected; the analysis was conducted by the Centre for Research on Energy and Clean Air.
- What
- A CREA study estimated the additional costs caused by the Strait of Hormuz-related fossil-fuel price shock after US-Israel strikes against Iran.
- When
- The analysis covered the six months following the February 2026 strikes, with the report published on August 26.
- Where
- The disruption centered on the Strait of Hormuz, a trade route off Iran’s coast, and affected global fuel importers.
- Why
- The conflict restricted movement through the Strait of Hormuz, pushing oil, LNG, diesel and other fossil-fuel prices above pre-war expectations.
- Global extra fossil-fuel cost
- $330 billion over six months
- India gross extra cost
- $22 billion
- India net additional cost
- $14.4 billion, or 0.38% of GDP
- India extra LPG cost
- Approximately $1.1 billion
- India LPG import change
- Imports fell 49% in March compared with the 2024-2025 average
- Clean-energy savings
- An estimated $36 billion in avoided fossil-fuel imports during the first five months
- Largest gross extra cost
- European Union: $78 billion