Minister of Petroleum & Natural Gas Hardeep Singh Puri on Monday assuaged fears of India’s crude oil supply being impacted due to the Iran-Israel war adding that the country has “sufficient” stocks.
He also emphasised that the scenario in the West Asia is being reviewed constantly.
“We have been reviewing global scenarios on a daily basis. We have sufficient stocks available,” Singh said.
Meanwhile, government sources said the current supply situation is “almost normal” with no problems in transporting the barrels from the region. The country has “sufficient” stocks and it has diversified its sources to 40 countries.
‘Sufficient’ stocks
“However, if the Strait of Hormuz is blocked, the situation will deteriorate. Closing the strait is in no one’s interest. Any supply side shock will send prices north,” said one of the sources.
The Iran-Israel conflict, if it prolongs, may destabilise crude oil and natural gas trade in West Asia, if the Shia-majority country blocks the Straits of Hormuz, the narrow shipping passage supplying 20 per cent of the global crude oil and one-fourth of liquefied natural gas (LNG).
India, which imports 90 per cent of crude oil and 50 per cent LNG, procures more than 40 per cent crude oil and almost half of its LNG from West Asia. Escalation in conflict would impact supplies and prices.
The country also exports diesel to Europe, which if the Strait of Hormuz is blocked, will go via the Cape of Good Hope. This would mean higher delivery time by two weeks and elevated shipping rates.