Emphasising that India is closely monitoring the geopolitics in the Middle East, Ministry for Petroleum & Natural Gas Hardeep Singh Puri said that the country has diversified procurement sources ensuring that a large volume of these supplies now do not come through the Strait of Hormuz.
“We have been closely monitoring the evolving geopolitical situation in the Middle East since the past two weeks. Under the leadership of PM @narendramodi Ji, we have diversified our supplies in the past few years and a large volume of our supplies do not come through the Strait of Hormuz now.”
“Our Oil Marketing Companies have supplies (for) several weeks and continue to receive energy supplies from several routes. We will take all necessary steps to ensure stability of supplies of fuel to our citizens,” the Minister said on X on Sunday late evening.
The Minister reiterated that India has sufficient supplies of crude oil and gas and the country is prepared to deal with any situation.
Out of the 5.5 million barrels of crude oil that India consumes daily, about 1.5-2 million come through the Straits of Hormuz. India imports roughly 4 million barrels through other routes.
On Friday, Puri reviewed the status of maritime offshore security for the oil and gas installations of India’s energy sector in a meeting with senior officials of National Security Council Secretariat, Ministry of Defence, Indian Navy, Indian Coast Guard, ONGC and Oil Ministry.
Nikhil Dubey, Kpler’s Senior Research Analyst of Refining and Modeling, in a LinkedIn post said “India sources nearly 88 per cent of its crude oil from abroad, with approximately 40 per cent (around 2 mb/d) flowing through the Strait of Hormuz (mainly from Middle Eastern Gulf nations), 33 per cent via the Suez Canal (primarily from Russia), 17 per cent via the Cape of Good Hope (mostly from West Africa and the Americas), and the remaining 10 per cent through other routes, including supplies from Southeast Asia and the Far East.”
While the recent Iran–Israel conflict has raised concerns about a potential chokepoint at the Strait of Hormuz, any blockade (which is very unlikely as continued oil flows are essential for Iran also to fund its military operations) would have a significant bearing on India’s oil trade and refining system, he added.
Rohit Chaturvedi, Partner- Transport and Logistics, Government, Infrastructure and Development sector Advisory Services, Forvis Mazars in India, pointed out that the conflict and the risk of blockade is likely to increase global freight rates significantly, especially for oil and fuel shipments.
The rise may be accounted for by an increase in tanker rates, a surge in insurance premiums, and rerouting via the Cape of Good Hope (adding 10–14 day delays, hence a substantial increase in transport costs). For India, this means rising energy costs, shipping delays, and inflationary pressure, he added.
For container freight, there is likely to be a shortage of containers and longer routes, adding to the freight costs of container movement, especially for the Europe-Asia trade corridor. The container shortages may have wider implications, causing disruption in trade along all the routes, Chaturvedi said.