The distant strait that sets the price of your day

By the US government's own count, the Strait of Hormuz is the chokepoint for about 20% of the world's oil — roughly a fifth of everything the planet uses, squeezed through a lane a few kilometres wide. India leans on it in two ways. Its oil import dependence is close to 90%, and about half of the natural gas it imports as LNG comes from Qatar and the UAE, sailing out through Hormuz. India has smartly cut its exposure — the government now sources about 70% of its crude from outside the strait. But here's the catch that trips people up: it doesn't matter where your barrel comes from. Oil trades at a single world price, so when Hormuz is threatened and that price jumps, India pays more on every barrel — even the ones from Russia or Africa that never went near the strait.

The government softens the first hit — it can trim fuel taxes, and the state oil companies smooth pump prices so they don't swing wildly day to day. But that cushion has limits, and it costs the treasury money. The cooking-gas cylinder is the sharpest kitchen hit, since a good part of India's LPG is Gulf-linked. And then diesel does the quiet damage: it moves everything — the truck bringing vegetables to your market, the tempo carrying milk, the delivery bike, the auto you flag down. So even if you never buy a litre of fuel yourself, you feel it second-hand, as slightly dearer tomatoes, a higher auto fare, and a bigger delivery charge. That's the "second wave" of an oil shock, and it reaches almost everyone.

Think of the rupee as your purchasing power abroad. When it slips, your phone and laptop get costlier, so do many medicines and the raw ingredients India imports to make them, so does a foreign holiday or a child's tuition overseas. India has a strong shield here — the Reserve Bank holds well over $600 billion in foreign reserves and can lean against the fall — but a long shock still leaks through. There's a second twist too. Pricier fuel and food push up inflation, and to fight inflation the RBI keeps interest rates high. High rates mean your home-loan and car-loan EMIs stay heavy. So a strait you can't find on a map can, months later, show up in your monthly loan payment.

India stores enormous public stockpiles of grain, buys from farmers at a fixed support price, and hands out cheap rations through the public distribution system. And when food prices even threaten to climb, the reflex is to slam the export door shut — exactly what happened in 2023, when India banned most non-basmati rice exports to keep home prices calm. So the rice itself stays cheap. The pain shows up around it instead — in the things India genuinely depends on the world for, like edible oil and pulses, and in fertiliser. India is the world's largest fertiliser importer, and the Gulf supplies roughly 40% of the world's traded urea; even India's home-made urea leans on imported gas. That raises the cost of the next crop — but again, the government usually swallows it as a subsidy rather than letting it hit the farm. Net effect: your plain rice holds; your cooking oil, your dal, and the taxpayer's bill are what stretch.

Around 9 million Indians work in the Gulf — the UAE, Saudi Arabia, Qatar, Oman, Kuwait — driving trucks, building towers, staffing hospitals and shops. They are a big reason India pulls in more remittance money than any country on earth, a record $135 billion in 2024–25, with the Gulf alone sending home around 40% of it. In states like Kerala, and across much of the north, that money isn't spare change — it pays school fees, builds houses, funds weddings and hospital bills. A war right on top of those jobs threatens all of it at once: the salaries, the workers' safety, and sometimes it forces costly evacuations. For those households, the price of petrol is a footnote. The real question is whether the monthly transfer from abroad keeps coming.