India plans to source crude oil from outside the Persian Gulf and to cut its own refined‑product exports, Oil Minister Hardeep Puri said Thursday, as a potential blockage of the Strait of Hormuz looms.
About a quarter of the world’s oil trade passes through the narrow waterway, which links the Gulf to the Indian Ocean. Market watchers worry that Iran could attack tankers transiting Hormuz, or close the strait altogether, amid its escalating conflict with longtime adversary Israel.
India’s roadmap to deal with the crisis
“We have enough diversified supplies of crude, and even if there were to be a disruption, we can source it from alternative suppliers,” Puri told NDTV.
“I don’t think this is something we are unduly worried about,” he added. Ample crude is available on the global market, so the concern is not supply but price.
Iran has previously threatened to close the strait in times of conflict, though there’s no sign of that happening so far. Of the 5.5 million barrels of oil India consumes every day, 1.5 million pass through the waterway, Bloomberg reported citing Puri.
India’s product exports
India is a net exporter of petroleum goods, with refiners such as Reliance Industries Ltd. and Nayara Energy shipping to countries such as the United Arab Emirates, Singapore, the US and Australia. The crisis could reduce those shipments if needed to maintain sufficient stockpiles at home, the news agency said.
India’s product exports have averaged 1.3 million barrels a day so far this year, with Reliance and Nayara dominating the industry with 82% of shipments, Bloomberg reported.
Oil prices shot up due to the Middle East tensions
US benchmark crude oil was up by 15 cents to $73.65 per barrel, while Brent crude, the international standard was added 19 cents at $76.89 per barrel.
Oil prices have been gyrating as fears dwindle that the conflict between Israel and Iran could disrupt the global flow of crude.
Another factor causing the fluctuation is the US President Donald Trump’s possible intervention in the Iran-Israel conflict. As hostilities between the two nations deepen, with both sides escalating attacks since last Friday, concerns are mounting over potential U.S. military involvement and the risk of a broader regional conflict.
Iran is a major oil producer and is located on the narrow Strait of Hormuz, through which much of the world’s crude passes.
