On Sunday night, US President Donald Trump posted on Truth Social that a peace deal with Iran was complete, that he was authorizing the toll-free opening of the Strait of Hormuz, and that the US naval blockade of Iran would be removed simultaneously.
Pakistani Prime Minister Shehbaz Sharif made a similar announcement minutes earlier. Iran’s deputy Foreign Minister Kazem Gharibabadi confirmed the deal.
Oil markets responded immediately. Brent crude fell over 4 percent to $83.82. West Texas Intermediate dropped 4.63 percent to $80.95, its lowest level since the first week of March.
But here is what the headlines are not saying clearly enough, as of Monday, June 15, the Strait of Hormuz has not physically reopened.
US-Iran Peace Deal in Switzerland
Gulf News, reporting this morning, noted that Iran has not yet fully confirmed implementation on the ground and that shipping flows remain only partially restored.
The Times of Israel pointed out that it remains unclear whether Iran has agreed to allow maritime traffic to flow without charging a toll.
The UK international mission that is ready to support mine removal in the strait has not yet been deployed. The formal signing of the deal is scheduled for June 19 in Switzerland.
Broader negotiations on several outstanding issues will continue over the next 60 days. A deal has been reached. The strait has not reopened. Those are two different things, and both matter.
Why Strait of Hormuz Matters to India?
India is the world’s third largest crude oil importer, bringing in nearly 85 to 90 percent of its crude from overseas. Of that, roughly 40 percent of its crude oil and nearly 90 percent of its LPG, the cooking gas that hundreds of millions of Indian families use every day, passes through the Strait of Hormuz.
When Iran closed the strait on February 28, following US and Israeli strikes on Iranian targets, it did not just disrupt global energy markets. It cut off a critical artery of India’s economy.
The data that followed tells the story in full. According to World Trade Organization figures cited by the UK House of Commons Library, crude oil ship traffic through Hormuz fell by 95 percent from pre-war levels.
LNG shipments collapsed by 99 percent. Before the conflict, roughly 3,000 vessels used the strait every month. That number effectively reached zero for weeks at a time.
What Four Months of Closure Cost India
India spent $174.9 billion on crude oil and petroleum product imports in the financial year ended March 2026, nearly 22 percent of its total import bill. With supplies constrained and global oil prices surging past $100 a barrel, that bill was on course to rise sharply.
The rupee hit a record low of 95.63 against the US dollar at the peak of the crisis, as India needed far more dollars to purchase the same quantity of oil.
Foreign investors pulled more than $20 billion out of Indian equities in just the first four months of 2026, already surpassing the previous full-year record for capital outflows. BMI, a Fitch company, cut India’s GDP growth forecast for fiscal year 2026 to 2027 to 6.7 percent, down from 7.7 percent the previous year.
The government’s response was to absorb as much of the shock as possible before passing it to consumers. It invoked the Essential Commodities Act on March 9, 2026, to prioritize and ration natural gas distribution, restricting industrial users while protecting domestic kitchen gas and CNG supplies.
It slashed petrol duties from Rs 13 per litre to Rs 3 per litre, and removed diesel duties entirely. New Delhi mandated work-from-home days for certain government employees to reduce fuel consumption.
Despite all of that, retail fuel prices still had to rise in May. Petrol reached Rs 97.77 per litre. Diesel climbed to Rs 90.67.
What Comes Next
The deal, once signed on June 19, is structured as a first-phase memorandum of understanding. It includes a permanent ceasefire, the reopening of Hormuz, and the lifting of the US naval blockade of Iran. Several other issues remain subject to negotiations over the coming 60 days.
For the strait to physically reopen, Iran needs to implement the agreement on the ground, mines need to be cleared, and shipping operators and marine insurers, who have largely stopped sending vessels through the corridor, need sufficient confidence to resume normal operations. That process will take time even after the formal signing.
India has already announced it is preparing to send tankers through Hormuz to load fresh energy supplies, which is a more significant step than what was happening earlier, when tankers already in the Gulf were simply crossing Hormuz to exit with existing cargo. That shift signals cautious confidence that normalization is coming. It has not arrived yet.
Lesson India Cannot Afford to Ignore Again
India knew, long before February 2026, that it was dangerously dependent on the Strait of Hormuz. The risk was documented.
The diversification away from Middle Eastern oil, accelerated by India’s rapid scaling of Russian crude imports after 2022, helped at the margins. Russian crude accounted for roughly 38 percent of India’s total oil imports by early 2026, up from under 1 percent in 2022.
That helped. It was not enough. Because even discounted Russian oil is priced in a global market where Brent crude sets the benchmark. And Brent moves when Hormuz moves.
The UAE has announced plans to accelerate construction of a new pipeline designed to bypass the Strait of Hormuz entirely, with an opening expected in 2027. India has its own strategic petroleum reserves, which provided roughly 25 days of buffer at the start of the crisis. That buffer was never designed to sustain a closure of nearly four months.
The deal announced on Sunday is the right outcome. The relief it brings to Indian consumers, to businesses running on diesel and LPG, to the rupee, and to equity markets is real. Fuel prices should begin easing in the weeks ahead. Capital may start returning. The GDP forecast may stabilize.
But the Hormuz crisis of 2026 has exposed, in the most expensive possible way, what happens when a country of 1.4 billion people depends on a 33-kilometre-wide waterway it has no control over for nearly half its energy supply.
The strait is not open yet. And when it does open, the question India needs to answer is not how quickly it can resume normal imports. It is what it will do differently so that the next time this corridor closes, and history suggests there will be a next time, the cost is not measured in record low rupees, a $20 billion capital flight, and a family in Delhi paying Rs 97 for a litre of petrol.
