Global crude oil markets have once again tightened, with rising prices threatening to weigh on economies across the world. In recent months, supply disruptions and distribution bottlenecks have driven up energy costs. Oil prices stayed elevated amid fears that the Iran war may drag on longer than anticipated and further disrupt global energy supplies. Brent crude futures increased by $1.71, or 1.6%, reaching $110.74 per barrel. Meanwhile, US West Texas Intermediate crude futures rose above $115 per barrel.
Back home, crude oil prices on Multi Commodity Exchange (MCX) were also trading marginally higher by 0.16% at ₹10,422 per barrel.
Against this backdrop of rising prices and mounting supply uncertainty, global brokerage house Goldman Sachs warned that Asia remained the most exposed globally to a prolonged Persian Gulf supply disruption.
While Goldman Sachs said the risk was not that the world would suddenly “run out” of oil altogether, but that specific countries and specific fuel products could face sharp shortages depending on how long the Strait of Hormuz remains effectively shut, it said in a report dated April 3.
Goldman highlighted that Asia was already showing signs of stress in key fuel categories, particularly petrochemical feedstocks such as naphtha and LPG, while for India, the brokerage noted that prolonged disruption could translate into tighter fuel availability, higher import costs, pressure on industrial supply chains, and a potential inflationary spillover for the broader economy.
Why Asia is at the centre of oil squeeze
According to Goldman Sachs, Asian countries in its sample, which together account for roughly one-third of global refined product demand, typically sourced around half of their refined product supplies from the Persian Gulf.
Countries with larger strategic reserves, such as China and Japan, may be better positioned to absorb the hit. The report highlighted that countries such as South Korea and Singapore were especially dependent, while India also stood out as materially exposed to disruptions in imports of jet fuel, fuel oil, and naphtha.
A key reason why the situation has not yet spiralled into a full-blown fuel crisis, Goldman Sachs said, is that many countries were initially able to offset missing Persian Gulf barrels by drawing in supplies from other parts of the world, processing stored crude, and in some cases curbing exports.
However, the brokerage warned that this cushion may now be weakening. It said Asia’s net oil imports had fallen sharply by the end of March, signalling that the impact from lower crude flows was intensifying just as earlier cargoes loaded before the disruption were fading out of the system.
What does it mean for India?
For India, the message from Goldman Sachs was that the country was not yet facing an outright nationwide fuel collapse, but it was entering a more fragile supply environment where product-specific shortages, higher import costs, and pressure on industrial fuel availability could become more visible if the Strait of Hormuz remains disrupted for longer. India’s large refining system and policy flexibility may help soften the blow, but its reliance on Persian Gulf-linked flows still leaves it exposed to prolonged instability.
According to Goldman Sachs’ country-product analysis, India could see a 34% average decline in local product supply from current Persian Gulf export disruptions after accounting for import and export adjustments, but before using domestic storage buffers.
The report also pointed out that India’s vulnerability was not evenly spread across products. It said India faced a 76% hit to jet fuel supply, a 55% impact on fuel oil, and a 43% impact on naphtha under its stress analysis, suggesting that the real pain could be concentrated in aviation fuel and petrochemical-linked segments rather than only in retail transport fuels.
The brokerage also noted that India had relatively modest domestic storage buffers compared with some larger Asian peers, with around 20 days of crude stocks and 16 days of refined products stocks available in its framework.
Oil price rally
Price action has also started to reflect these stress points. Goldman Sachs said diesel and jet fuel had seen the sharpest rally globally, with average increases of roughly $130–140 per barrel, or about 150%, since late February. In India, Goldman Sachs’ pricing snapshot showed jet fuel prices up by $137 per barrel, gasoil up by $198 per barrel, and naphtha up by $54 per barrel since February 27, underscoring how quickly physical markets had tightened even before inventories were fully exhausted.
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