Sensex drops 0.91% as Hormuz blockade lifts oil

Why markets turned risk-off

Indian equities opened to heavy selling after crude prices spiked on fresh geopolitical risk. The immediate trigger was the failure of recent talks between the US and Iran to produce an agreement, alongside an order by US President Donald Trump to blockade the Strait of Hormuz. With the strait central to global oil flows, the market reaction was swift across risk assets. Rising crude also revived concerns around India’s import bill and inflation sensitivity. The rupee traded weaker as energy prices moved higher.

Sensex and Nifty: sharp intraday fall, lower close

Selling pressure was visible early in the session, with both benchmarks hitting steep intraday lows before trimming losses by the close. The BSE Sensex dropped as much as 1,682 points, or 2.1%, to a day’s low of 75,868.32. The Nifty50 fell 495 points, or 2%, to its intraday low of 23,555.60. By the end of trade, the Sensex settled 703 points, or 0.91%, lower at 76,847.57. The Nifty50 closed 208 points, or 0.86%, down at 23,842.65.

Crude shock: Brent above $102 after 7.5% jump

Global oil prices moved sharply higher as concerns around shipping and supply routes returned. Brent crude jumped 7.5% to trade above $102 per barrel after the Hormuz-related developments. Separate market updates also showed how quickly prices have been swinging amid the same set of risks. In another session, Brent crude rose by 1.13% to $17.01 per barrel, while WTI crude increased 1.39% to $19.24 per barrel. Oil had also fallen nearly 20% on a Wednesday, dipping below $100 per barrel, a level it had held since February 28.

Rupee weakens as import cost worries grow

Currency markets reflected the pressure of higher crude on India’s external balances. The rupee traded weaker by 0.41% at 93.33, with rising crude prices flagged as a key driver through a larger import bill. The linkage is direct for India because oil is a major component of the merchandise import basket. A sustained rise in crude typically raises freight and insurance costs as well when shipping risks increase. That combination can quickly feed into broader risk aversion.

Shipping disruption signals: activity below 10% of normal

Beyond price action, operational indicators in the Strait of Hormuz contributed to the risk-off mood. Shipping activity through the Hormuz Strait was reported at less than 10% of normal levels on a Thursday. Shipping companies also indicated they wanted clearer terms around the ceasefire before dispatching vessels through the route. The market focus stayed on whether supply disruptions would be short-lived or persistent. The Asian Development Bank (ADB) said oil prices may remain elevated in the near future, with stability potentially returning if geopolitical tensions ease.

India MCX crude: futures trade above ₹9,000

Domestic crude contracts mirrored the global move. On the Multi Commodity Exchange (MCX) in India, crude oil futures for April 20 delivery traded at ₹9,150 per barrel, up ₹217 or 2.43% around 11:07 AM. In another update, MCX crude was reported higher by more than 1% at ₹9,099 per barrel. These levels were discussed alongside global crude moving toward the $114 to $115 range in one report, with WTI around $17.13. The sharp moves underscored how fast hedging and pricing conditions can change when shipping risk rises.

Broader conflict backdrop and supply-side headlines

The crude spike was also linked in the provided material to a wider Middle East conflict involving Iran, Israel, and the United States, with attacks on energy infrastructure. One account cited strikes on Iran’s South Pars gas field and reported damage to Qatar’s LNG plants, described as critical because they supply 47% of India’s gas imports. There were also reports of a Saudi refinery at the Red Sea port of Yanbu being targeted and a fire at a refinery unit in Kuwait. Another update said QatarEnergy reported missile strikes hitting Ras Laffan, a major LNG processing hub. These developments contributed to concerns about prolonged supply chain disruption.

Policy and industry responses mentioned in reports

International and domestic responses were highlighted across the material. The International Energy Agency (IEA) announced a coordinated release of 400 million barrels of crude oil from strategic reserves, with commentary noting this equals only about four days of global oil production. In India, the government directed oil and gas companies to provide operational information to the Petroleum Planning and Analysis Cell (PPAC). Officials also said India is expanding its crude sourcing network from 27 to around 40 countries, and that two crude oil cargoes and two LNG shipments were being rerouted through alternative supply chains. These steps were presented as measures to ensure supply adequacy amid uncertainty.

Key numbers at a glance

Market impact: what higher oil means for India

The material also laid out macro sensitivities for India if crude stays high. A rise in crude oil prices by $10 a barrel was estimated to widen the current account deficit by around $14 to $15 billion. India was described as importing roughly 88% of its oil requirements, with a large share flowing through the Strait of Hormuz. It was also stated that nearly 50% of crude oil imports and 85% of LNG supplies transit via Hormuz. Another estimate said a $1 per barrel increase sustained for a full year raises India’s import bill by around ₹16,000 crore.

Inflation considerations were also cited. The weight of petrol, diesel and LPG in the new CPI series was put at 6.8%, compared with 3.6% in the previous series. Even where pump prices are held, higher input costs for manufacturers using oil derivatives can feed into product prices. One estimate in the text suggested headline CPI could rise by around 10 to 15 basis points through such pass-through.

Import bill and reserves: the numbers cited

The reports provided specific import-spend and stock-cover indicators. India spent $137 billion on crude oil imports in the financial year ended March 31, 2025. From April 2025 to January 2026, $100.4 billion was spent on importing 206.3 million tonnes of crude oil. Government sources were also cited saying India had a stock of 25 days of reserve for crude and 25 days of products, including quantities in transit on ships headed to Indian ports. These figures are central to how markets judge resilience during short-term disruptions.

Conclusion: volatility tied to Hormuz and energy headlines

The day’s equity decline reflected how quickly India’s risk sentiment can turn when crude and shipping conditions deteriorate. Benchmarks recovered from deeper intraday losses but still closed lower, while the rupee weakened alongside the oil spike. Multiple updates in the provided material pointed to reduced shipping activity, infrastructure attack risks, and official efforts to secure supply. Investors are likely to keep tracking developments around the Strait of Hormuz, crude benchmarks, and any further official actions or statements cited in ongoing coverage.