As tensions persist in the Middle East, heightening the chances of Iran shutting down the Strait of Hormuz, India under the watch of Petroleum and Natural Gas Minister Hardeep Singh Puri is keeping a watchful eye on international oil trends.
Hardeep Puri Assures of Stable Fuel Supplies
Union minister for petroleum and natural gas, Hardeep Singh Puri, has again assured that India has sufficient oil supplies to cater to its demand.
“We have been closely monitoring the evolving geopolitical situation in the Middle East since the past two weeks,” Puri said in a post X. The Union minister noted that India has “diversified our supplies in the past few years and a large volume of our supplies do not come through the Strait of Hormuz now.”
Puri said that the nation’s oil marketing companies have several weeks’ worth of supply, adding that they “continue to receive energy supplies from several routes.”
Hardeep Puri on India’s Energy Strategy and Price Preparedness
The Union minister guaranteed that all required actions will be taken to maintain the stability of fuel supplies to Indian citizens.
Last week, following the Israeli strikes on Iran, Puri asserted that India has enough energy supplies for the coming months. “India’s energy strategy is shaped by successfully navigating the trilemma of energy availability, affordability and sustainability,” he said, adding that, “We have adequate energy supplies for the coming months.”
The brewing tensions over the closure of the Strait of Hormuz have led countries to think about the possible repercussions on oil prices. NDTV reported, citing sources, that the central government might considering reviewing the excise duty cuts on fuel if the crude oil price goes above $105 per barrel.
India’s Import Landscape and Impact of Strait Closure
The simmering tensions surrounding the closure of the Strait of Hormuz have prompted nations to consider the potential impact on oil prices. According to sources, reported NDTV, the centre government may consider reconsidering the excise duty reductions on petrol and diesel if the crude oil price crosses $105 a barrel.
India, the world’s third-largest oil importer and fourth largest gas purchaser, imports more than 85 per cent of its crude oil requirements and about half of its natural gas demand, a news agency PTI report said. Among these, more than 40 per cent of the oil and half of the gas imports are from the Middle East.
But the shutdown of the Strait of Hormuz, which carries approximately one-fifth of global oil consumption, could affect India’s oil industry and international oil prices.
Approximately 2 million barrels per day of India’s total import of 5.5 million barrels per day pass through the Strait of Hormuz.
India Diversifies Sources, Minimizes Hormuz Dependency
Nonetheless, industry experts and commentators are said to have stated that India is not going to lose any sleep even if the Strait were to be closed down. The reason is that it has alternative sources ranging from Russia to the US to Brazil, which are already ready to plug any gap.
India’s key gas supplier, Qatar, doesn’t use the Strait of Hormuz for deliveries to the country, PTI said. And other liquefied natural gas (LNG) sources in Australia, Russia, and the US would also be unaffected by the closure of the narrow waterway.
While India is importing approximately 90 per cent of its crude oil, over 40 per cent of imports come from Middle Eastern nations like Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait, whose shipments go through the Strait of Hormuz.
But in recent times, Russia has emerged as India’s largest crude oil supplier, which is processed into petroleum products such as petrol and diesel. In June, Indian refiners had brought in about 2 to 2.2 million barrels a day of Russian crude oil, the most in two years.