Strait of Hormuz closure highlights India’s LPG supply vulnerability.
Global energy markets are showing mixed signals as oil prices diverge sharply across regions, reflecting the increasing impact of geopolitical tensions on supply.
Benchmark crudes fell in the latest trading session, with West Texas Intermediate (WTI) dropping 2.06% to $94.16 per barrel and Brent slipping 1.45% to around $107.10 per barrel, as of 5:02 GMT on Friday (2:05 pm Tokyo, March 20, 2026).
The decline indicates a short-term easing in global market sentiment, likely driven by profit-taking or expectations of temporary supply adjustments.
However, the main focus remains on the Middle East.
Murban crude, a major regional benchmark exported from the United Arab Emirates, surged to around $131 per barrel, rising more than 6% in a single session.
The sharp increase highlights tight physical supply conditions in the Gulf, where ongoing tensions with Iran continue to restrict exports.
Meanwhile, natural gas prices dipped slightly, reflecting weaker short-term demand or changing market expectations.
The divergence between Brent/WTI and Murban highlights a key dynamic: while global benchmarks reflect broader market sentiment, regional crudes are responding directly to physical supply risks—particularly in the Persian Gulf, which handles a significant share of the world’s oil exports.
Analysts warn that this gap could widen if disruptions continue. Traders may increasingly factor in localized shortages, especially for Asian buyers who depend heavily on Gulf crude grades.
In essence, the market is fragmenting: paper markets are softening, while physical barrels in high-risk regions are becoming more expensive.
Industry observers warn that if tensions escalate further, this divergence could signal a deeper global supply crunch.
In India, the closure of the Strait of Hormuz has cut off about 90% of its LPG imports, exposing the country’s heavy dependence on Gulf supplies. With domestic production meeting only 40% of demand, the disruption is already triggering panic buying and forcing fuel rationing in parts of the economy.
Potential alternative supplies from the US, Russia, or Norway come with higher costs and logistical constraints, making a rapid replacement of Gulf volumes extremely challenging.
Natural gas fell 1.23% to $3.127 per million British thermal units (MMBtu) as of 5:02 GMT on Friday.
