Energy Sector in Focus: What It Means for Indian Energy Markets?
- 19th March 2026
- 01:30 PM
- 3 min read
Summary
West Asia tensions are triggering a refined fuel crisis more severe than any crude supply shock, according to a PL Capital report. A supply gap of approximately 10 million barrels per day is expected by 1 April 2026. India faces particular exposure, with 50–60% of its LPG imports transiting through the Strait of Hormuz - placing household fuel supply under direct threat.19 March 2026 | Mumbai, India
Refined products face deeper crisis than crude, PL Capital warns
Infrastructure damage to refineries, not crude availability is driving the most acute stress in global energy markets, according to a report by PL Capital.
The report identifies a rapidly intensifying supply disruption, with an estimated gap of approximately 10 million barrels per day (mb/d) expected by 1 April 2026. The imbalance, it notes, is more severe in refined products than in crude oil.
Why refineries matter more right now?
Crude production in Middle Eastern fields can be restarted relatively quickly following disruption. Refinery outages, infrastructure damage, and logistical constraints, however, cause prolonged shortages of refined products – and the consequences are harder to reverse.
Five key Middle Eastern producers together account for approximately 20 mb/d of crude production and around 5 mb/d of refining capacity. Any disruption in the region, the report states, is therefore highly impactful for global markets.
Physical markets already under strain
The crisis is visible in physical supply. Sydney is estimated to be approximately 1 million barrels short – a signal of how quickly import-dependent regions with limited domestic refining capacity become exposed.
Disruption around the Strait of Hormuz is expected to deepen this imbalance further. Even a single large refinery outage, the report notes, can remove substantial product volumes from the market.
India’s LPG exposure
India faces direct risk from the current disruption. Approximately 50–60% of India’s LPG imports transit through the Strait of Hormuz. With these flows disrupted, the country is facing a severe LPG supply crunch – a situation the report describes as politically sensitive given the high share of LPG consumption among Indian households.
The government has begun implementing measures to manage the situation. However, the report cautions that the loss of imports caused by Strait of Hormuz disruptions cannot be fully compensated, and refinery-level options to increase LPG supply remain limited.
Outlook
Crude oil availability remains relatively manageable at present. Refined product markets particularly LPG are facing the most severe constraints and are unlikely to normalise quickly. PL Capital’s report indicates that prolonged refinery outages and infrastructure disruption will continue to weigh on supply for the near term.
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