Authors: Narmadha S
Abstract: This paper examines the economic hazards and financial threats faced by Indian ports engaged in Petroleum, Oil and Lubricants (POL) handling during and after the 2026 Iran–Israel–US war and the resulting closure and contested reopening of the Strait of Hormuz (28 February–20 June 2026, with intermittent renewed closures thereafter). Drawing on government press releases, central bank and ministry data, international energy agency reporting, and Indian equity- and currency-market data, the paper quantifies the channels through which the conflict transmitted economic shocks to Indian port-based petroleum logistics: crude price escalation, war-risk insurance inflation, freight-rate spikes, port congestion, rupee depreciation, capital outflows, and fiscal strain on oil marketing companies (OMCs). The analysis finds that although India's structural diversification away from Gulf-origin crude (reducing Hormuz-linked exposure from roughly 55% to approximately 70% sourced outside the Strait) cushioned physical supply disruption, it did not insulate the country from price-channel and freight-channel shocks. Brent crude rose from approximately $69–72/barrel in February 2026 to a peak near $113–119/barrel in March 2026, India's crude basket peaked at $113.57/barrel, war-risk insurance premiums for very large crude carriers (VLCCs) rose 300–400%, and Indian benchmark equity indices shed over ₹40 lakh crore in market capitalisation within four weeks. The paper concludes with a hazard-mapping framework for Indian POL-handling ports and policy recommendations for strategic reserve management, insurance-pool mechanisms, and freight-cost mitigation.
