Nomura | India oil and gas

Research evidence excerpt

Nomura | India oil and gas

Global Markets Research

14 July 2026India oil and gas

EQUITY: OIL & GAS/CHEMICALS

Risk premium returns as ceasefire unravels Research Analysts

India Oil & Gas/Chemicals

Refining margins may remain elevated; OMCs and CGDs Bineet Banka, CFA - NFASL

bineet.banka@nomura.commay face margin volatility

+91(22)4037 4044

Oil price volatility returns on West Asia escalation

With Iran announcing the closure of the Strait of Hormuz (SoH) and the US reinstating

naval blockade, commercial shipping is back to the pre-ceasefire situation as traffic via

the SoH has effectively come to a complete halt with only dark transits being reported.

The situation may get worse than before if Houthi militias spring into action on the western

side at the Bab al-Mandab strait (media report), through which 10-12% of global oil flows

currently. The impact on India could be particularly exacerbated as more than 50% of

India’s oil imports came from Russia in June, and almost all of it came through the Red

Sea route, passing the Bab al-Mandab strait. Saudi’s East-West pipeline, which avoids

the SoH choke point and passes through the Bab al-Mandab strait, accounted for ~85-

90% of Saudi oil exports in June. Overall, we think India appears highly vulnerable with

dual choke points getting blocked together. Longer shipping routes for Russian crude (via

the Cape of Good Hope) may result in higher shipping costs and compression of

discounts that Indian refiners enjoyed in the past. A possible closure of the Bab al-

Mandab strait could also impact exports of diesel/ATF from India to Europe.

Oil prices have reacted sharply with a ~10% spike within the last two days, reversing the

slide from ~USD100+/bbl to ~USD70/bbl post ceasefire announcement. We expect crude