Amid rising tensions in the Middle East, government sources on Tuesday said that India has 25 days of crude oil and refined oil stocks. Sources also said there are no immediate plans to increase petrol and diesel prices despite global oil prices rising sharply due to geopolitical tensions. Brent crude price has reached near USD 80 per barrel – roughly 10 per cent more since the Iran crisis – and is expected to rise further as the Strait of Hormuz, one of the world’s most critical oil transit chokepoints, has been shut by Iran. For India, higher prices means higher import bill.
India imports about 88 per cent of the crude oil it needs – the raw material for fuels such as petrol and diesel – with more than 50 per cent supplied by Middle Eastern countries and transiting the narrow Strait of Hormuz, the flows from which have been disrupted amid the Iran crisis.
Military strikes on Iran
The United States and Israel launched military strikes on targets in Iran over the weekend. Tehran retaliated with missiles and drones aimed at Israel and countries hosting US forces, including the United Arab Emirates, Qatar, Kuwait, Bahrain, Iraq, Jordan and Saudi Arabia.
Media reports suggest the conflict has effectively closed the Strait of Hormuz, a key conduit for global energy flows. Roughly one-third of the world’s seaborne crude oil exports and about 20 per cent of liquefied natural gas shipments transit the narrow waterway.
India is world’s third largest oil importer
India, the world’s third largest oil importer, imports roughly half of its crude needs through the narrow Strait. Its mainstay liquefied natural gas (LNG) supplier in Qatar also uses the strait to ship the fuel to India.
In case of closure, India can tap suppliers in West Africa, Latin Amercia and the US to make up for the shortfall from the Middle-East. India could also tap Russian oil to make up for the deficit.
India exported 23.7 million tonnes (474,000 bpd) of petroleum products or 10 per cent of the country’s fuel consumption, in 2024-25. During April-January, exports stood at 53.3 million tones.
