After the US and Iran announced a two-week ceasefire, crude oil prices fell significantly on Wednesday but increased slightly on Thursday as Israel’s attacks on Lebanon and Iran’s subsequent warnings over the Strait of Hormuz put the truce into jeopardy.Oil prices had surged by over 50% in March owing to Iran’s effective closure of the Strait of Hormuz — which accounts for a fifth of the world’s oil and liquefied natural gas (LNG) flows during peacetime — and the attacks on energy infrastructure in the Gulf. By many counts, it has been the worst energy crisis the world has even seen.The supply disruptions and price surges have hit Asia especially hard. India, in particular, depends heavily on supplies through the strait to meet its oil, LNG and liquefied petroleum gas (LPG) needs.Although the temporary truce brings some relief, the energy market is not writing off the risks associated with global oil supply through the Strait. Indeed, Iran responded to the attacks on Lebanon by again warning ships to stay off the chokepoint.Oil prices, therefore, are still around 30% higher than pre-war levels. Currently, the ceasefire is fragile and a lasting peace agreement appears elusive.Also Read | Explained, in three charts: How India became so dependent on LPG imports“Normalised trade flows are far from certain, and hostilities could resume at any time. The market shouldn’t assume an immediate return to pre-crisis conditions,” said James Bambino, Senior Principal Analyst, Oil Trading Research, S&P Global Energy on Wednesday.Iran had said after the ceasefire that safe passage through the Strait of Hormuz will be possible for two weeks. Now, it appears to have shut the door again. How shipping lines view these developments and how keen they would be to send their ships back into the Persian Gulf remain to be seen.Story continues below this adEven if lasting peace comes to West Asia and the Strait, normal pre-war energy flows from West Asia cannot be restored immediately. According to Zhuwei Wang, Director of research & analysis at S&P Global Energy, assuming that traffic begins to flow through the Strait of Hormuz, “trade flow normalisation will take months, not weeks”. “Demand destruction — already underway — will likely continue despite the ceasefire,” he said.Gulf energy infrastructure such as export terminals, refineries, oil fields, and LNG processing units could take months, even years in some cases, to get back to normal production levels.Also Read | Russia is not fighting West Asia war, but is its real winner — thanks to crude windfall‘Higher for longer’ pricesIf the ceasefire holds and Iran eases passage through the Strait of Hormuz, this could enable the evacuation of large volumes of oil, petroleum fuels, and LNG on board ships stranded in the Persian Gulf — to the west of the Strait — over the coming days, improving the supply situation in the short term. About 180 million barrels of crude oil and refined fuels and over 1 million tonnes of LNG are stranded in the Persian Gulf, according to some estimates.“But clearing the backlog of cargoes is only part of the problem. Getting tankers out of the Gulf is one thing; persuading shipowners and charterers to send vessels back in is quite another. The unprecedented blockade of Hormuz has caused severe disruption to global shipping markets by sharply reducing tanker availability, pushing freight rates to record highs.” Reuters columnist Ron Bousso wrote.Story continues below this adThe disruption in flows through the Strait of Hormuz forced Gulf oil producers to shut in around 7.5 million barrels per day (bpd) of oil production in March, which accounts for roughly 7.5% of global oil supply, according to estimates by the US Energy Information Administration (EIA). In an April 7 report, the EIA said that production shut-ins will rise to 9.1 million bpd in April, even under the assumption that the conflict won’t persist beyond this month and that traffic through the Strait of Hormuz would gradually resume.“Under those assumptions, we expect production shut-ins will fall to 6.7 million bpd in May and return close to pre-conflict levels in late 2026,” the EIA said. Going by the EIA’s estimates and views from experts and analysts, it doesn’t look like West Asian oil and gas production and supplies would normalise quickly even if maritime traffic through the Strait were to normalise. This also means that energy prices are expected to remain elevated for a while, maybe not as much as the levels seen in recent weeks, but higher than the pre-war levels.In a March 20 report titled ‘If the war were to end tomorrow…’, international brokerage CLSA had said that any news on opening up of the Strait of Hormuz may drive a “reflex pullback in crude oil and LNG prices”; but it also foresaw a much tighter post war supply-demand for oil and LNG versus pre-war levels due to “risks on pace of restart of production from the Gulf as well as likely new re-stocking demand”. The view is shared by numerous energy market experts and analysts.“We believe that the war has fundamentally changed the demand-supply equation for the next few quarters versus the popular opinions held at the start of 2026. On the supply side, restart of oil as well as LNG feeding gas fields in the Hormuz countries may be a process running into a few months with uncertainty, with risk of some permanent loss in production levels of some wells. On the demand side, rising focus on energy security as well as depleting strategic inventory may drive demand for both crude oil as well as LNG to a higher level than envisaged a few months ago,” CLSA said, adding that the medium term reality after the war could see “higher for longer crude and LNG prices”.Story continues below this adAlso Read | Two weeks of war in West Asia: The five big takeaways from the widening conflictThe India angleIndia, like various other nations, has been wishing for a quick end to the war and a rapid normalisation in global energy flows. The country’s heavy dependence on energy imports, with a sizable chunk coming from West Asia via the Strait of Hormuz, has led to a double whammy of supply tightness and price surge. While highly diversified crude sourcing has helped India in ensuring adequate oil, petrol, diesel, and jet fuel availability, it was forced to ration gas supplies to certain industries and commercial consumers in order to ensure adequate availability for households and a few priority sectors. Moreover, the surge in international prices of oil and gas has forced India to import oil and gas at extremely high rates, as the country had to prioritise supply security over price considerations.Given that India imports 1.8-2 billion barrels of crude oil a year, every $1-per-barrel increase in oil prices would bump up the country’s oil import bill by up to $2 billion on an annualised basis. According to a March report by Nomura, India is among the three most vulnerable Asian economies to high oil prices in terms of import bill and current account balances, the other two being Thailand and South Korea. It said that every 10% oil price increase typically widens India’s current account deficit by 0.4% of the GDP.The government has slashed excise duty on petrol and diesel by Rs 10 per litre, and oil marketing companies have not raised pump prices despite heavy losses. They are absorbing heavy under-recoveries on sale of LPG to households and jet fuel for domestic flights, where only a fraction of the price hike has been passed on.To cover the shortfall in oil supplies from West Asia, India ramped up oil imports for other countries, particularly Russia.