Brent crude oil hit $115 per barrel this week. The price on the screen is only part of the story. Behind it sits a set of structural dislocations, running from the Strait of Hormuz through South and Southeast Asia to the grocery aisle, that economists and multilateral institutions say are deepening by the day.
“What we do know is that growth will be slower – even if the new peace is durable,” said the MD of the International Monetary Fund, Kristalina Georgieva in remarks on the global impact of the Middle East energy shock.
Global oil flows have fallen 13% since the conflict escalated. Liquefied natural gas supply is down 20%. Brent crude, which traded near $72 per barrel before hostilities intensified, has climbed as high as $120 per barrel in recent sessions.
West Texas Intermediate (WTI) approached $100 per barrel as markets priced in uncertainty over ceasefire durability and the possible reopening of the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world’s traded oil passes.
The International Monetary Fund (IMF) has said it expects to downgrade global growth forecasts under every scenario it models, including the optimistic ones.
India’s Oil Marketing Companies: Absorbing the Shock
India imports roughly 85% of its crude oil, and the government has kept domestic petrol and diesel prices frozen to protect consumers from the full force of the global surge.
The cost of that decision is being borne almost entirely by state-run oil marketing companies (OMCs), including Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.
The companies are currently losing an estimated Rs 24 per litre on petrol and Rs 30 per litre on diesel. The losses reflect the gap between the price at which the OMCs buy crude on international markets and the subsidised retail price they are required to sell at domestically.
The World Bank noted that India does carry economic buffers, including high foreign exchange reserves, available fiscal space, and low headline inflation, that give New Delhi more room to manoeuvre than many peer economies.
CareEdge, a domestic credit rating agency, estimates the sustained oil price elevation could add the equivalent of 0.5% of gross domestic product, or roughly Rs 1.9 trillion, to India’s fiscal burden in the financial year ending March 2027. India’s growth is forecast to slip from 7.6% in 2025 to 6.9% in 2026 as external headwinds accumulate.
To manage supply risk, India has been quietly pivoting its crude import mix westward, away from its traditional West Asia dependence. Shipment data suggests India could receive up to 12.51 million barrels of Venezuelan crude during April 2026, which would represent the highest single-month Venezuelan import volume in more than six years.
APAC Growth Forecasts Fall as Food Chains Buckle
Fresh produce supply chains across Asia-Pacific are under measurable strain, with diesel fuel costs rising between 11% and 49% depending on the region.
Southeast Asia is experiencing the steepest diesel cost increases of any sub-region. Refrigerated transport, cold storage operations, and cross-border agricultural logistics all run on diesel, meaning the oil shock transmits directly into food costs for ordinary consumers.
The Asian Development Bank (ADB) projects Asia-Pacific regional growth will fall from 5.4% in 2025 to 5.1% in both 2026 and 2027. If hostilities persist for a full year, the region could lose 1.3 percentage points of growth across the 2026-2027 window, the ADB warned.
The World Bank separately put East Asia and Pacific growth at 4.2% for 2026, down from 5.0% in 2025, with China’s economy decelerating at the same pace.
South Korea’s KOSPI 200, the benchmark index for one of Asia’s most trade-exposed economies, led regional declines with a 3.8% drop as oil prices climbed. Economists said recession risks across the broader region will become visible by fall 2026 if the conflict continues at its current intensity.
The IMF chief’s framing was unambiguous. “All roads lead to higher prices and slower growth,” the fund’s leadership said in remarks, adding that no scenario the institution modelled produced an improvement in the global growth outlook.
The ceasefire speculation that briefly pushed oil prices down more than 5% last week has not held. WTI’s return toward $100 per barrel reflects the market‘s assessment that structural supply damage is embedded in prices.
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