India is watching closely as a US-Iran peace deal raises hopes of easing global energy tensions, but government officials caution that normalisation of oil flows could still take weeks even if the agreement holds.
A senior petroleum ministry official told NDTV Profit that the reopening of the Strait of Hormuz, which is expected once the deal is signed, would allow the crude, LNG, and petroleum product shipments to resume without any restrictions in the coming days. "...but it will take several weeks to normalise supplies and restocking," the official said.
The 107-day long West Asia war had forced several Gulf producers to shut in large volumes of oil and gas output. Industry estimates suggest nearly 180 million barrels of crude and refined fuels remain stranded in the Gulf, along with more than 1 million tonnes of LNG. Before the conflict, the Gulf accounted for roughly 40% of India's crude imports, 60% of its LNG imports and 90% of its LPG imports, underscoring what is at stake as supply routes begin to reopen.
Analysts remain wary of the pace of recovery and see limited near-term relief for global oil prices. Oil fell to a three-month low of $83 per barrel after the US and Iran announced a peace agreement, though prices remain about 20% above pre-war levels amid ongoing supply and transit uncertainty.
Oil's fall reflects a relief rally, not a trend reversal, according to Maulik Patel, Head of Research at Equirus Securities. He expects prices to hold in the $75–80 per barrel range, adding that a sustained move back to $60–70 is unlikely even if geopolitical risks ease.
“Normalisation is a Q3 2026 story at the earliest,” he said.
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On gas, Patel sees the peace deal as largely irrelevant in the near term. "Damage to infrastructure producing around 17% of Qatar's LNG export capacity could take 3-5 years to repair. While LNG prices may ease gradually as transit resumes, there is no credible path back to pre-crisis levels within 2026."
Crude oil prices could take up to one year to normalise to pre-war levels given that almost 10-11 million barrels per day of production has been shut in West Asia besides which some facilities have suffered damages, said Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, at ICRA.
Gulf energy infrastructure — export terminals, refineries, oil fields, and LNG processing units — suffered extensive damage due to the war.
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