India's crude oil inventories have declined by approximately 15% since the US-Iran conflict erupted in late February, according to commodities analytics firm Kpler. The country's crude oil stockpile has dropped to 91 million barrels from 107 million barrels at the end of February. Despite this significant decline, India's daily oil consumption of roughly 5 million barrels means current inventories are sufficient for nearly 18 days of demand based on Kpler's calculations. The latest developments show petrol and diesel prices have been raised by nearly ₹3 per litre after a prolonged period of price stability, as oil marketing companies struggle with rising under-recoveries caused by expensive crude imports.
Indian markets experienced significant pressure as Brent crude climbed to $106 per barrel amid tensions surrounding the Strait of Hormuz and fears of prolonged supply disruptions. The rupee slipped past the 96-per-dollar mark for the first time, pressured by rising oil prices, a stronger dollar and persistent foreign fund outflows. On May 15, the Nifty 50 fell 0.19% to 23,643.50 and the Sensex shed 0.21% to 75,237.99, with both indices losing 2.2% and 2.7% for the week respectively, snapping a two-day winning streak. Foreign institutional investors continued their selling spree with record outflows of $23.63 billion so far in 2026, reflecting growing concerns over rising fuel costs and macroeconomic pressures.
Despite broader market weakness, IT stocks provided some support with the Nifty IT index rising 1.3% after four consecutive sessions of losses triggered by concerns around AI-led disruption and slowing demand outlooks. Infosys, Tata Consultancy Services, Tech Mahindra and HCL Technologies rose, though the gains did little to help benchmark indices or erase the 5.7% decline seen by IT stocks over the week as OpenAI's launch of a new AI venture, backed by a $4 billion investment, sparked fears of revenue disruption. Metal stocks emerged as the worst-hit pocket, dragging the Nifty Metal index down nearly 2% after profit booking and concerns about possible rate hikes in the U.S. weakening global industrial demand. Oil-linked shares also remained weak as the Nifty Oil & Gas index fell 1.67%, with investors concerned that elevated crude prices could continue to hurt margins and increase subsidy-related pressure on refiners.
India's crude oil imports have averaged around 4.5 million barrels per day over the last two-and-a-half months, down from nearly 5 million barrels per day before the outbreak of the war, as reported by Kpler. The government stated on Monday that existing crude reserves are enough to meet as much as 60 days of national consumption, though it did not provide detailed calculations. According to Kpler's lead analyst, refinery operating rates have not fallen in proportion to the decline in imports, indicating that refiners are bridging part of the supply shortfall by drawing down existing inventories. With India remaining highly dependent on imported crude oil with nearly 85% of its oil requirement sourced from overseas markets, the country is particularly vulnerable to global oil shocks.
