India is scouting for alternative sources for importing crude oil, liquefied petroleum gas (LPG) and liquefied natural gas (LNG) to prepare itself if the conflict in West Asia lasts for more than 10-15 days, a government source said on Tuesday.
Shipping through the Strait of Hormuz between Iran and Oman, which carries around a fifth of oil consumed globally as well as large quantities of gas, has ground to a near halt after vessels in the area were struck as Iran hit back after the US and Israeli strikes.
The government is continuously monitoring the situation and is “reasonably confident that if one source closes, another window will open”, the source told reporters.
Indian refiners process about 5.6 million barrels per day of crude, with about 40 per cent of their crude imports passing through the Strait of Hormuz, he said.
India holds sufficient crude inventories to meet demand for about 25 days. Also, refiners hold 25-day inventory of gasoil, gasoline and liquefied petroleum gas, he said, taking the total inventory to about 50 days.
However, the position is tighter for natural gas. India has only a few days of LNG supplies left after its largest supplier, Qatar, halted LNG production on Monday.
“If Qatar doesn’t open in the next few days, then we may have to scout for alternatives and take additional measures,” he said.
Indian companies have already reduced gas supplies to some industrial customers from Monday. LNG is a key part of the overall pool of gas source which feeds transport services in Delhi and Mumbai and piped gas to homes.
The source did not mention whether Indian refiners would increase purchases of Russian oil.
In recent months, Indian refiners curtailed purchases of Russian oil to avoid punitive tariffs imposed by President Donald Trump and help New Delhi clinch an interim trade deal with Washington.
However, with a number of ships floating around in the Arabian Sea with Russian barrels, Indian refiners can potentially switch to it, if greenlit by the government.
With Brent crude nudging $85 a barrel, India’s options will come with a higher cost. Lead research analyst (refining and modelling) with Kpler said India can increase procurement from the Atlantic Basin — including the US, Brazil, Canada, mexico and West Africa — though these barrels involve longer voyage times and higher freight exposure.
Russian crude also remains commercially viable depending on policy and payment channels. “The key constraint is not global supply availability, but voyage duration, tanker availability, risk premiums, and insurance issues. Replacing Gulf barrels is possible, but it comes at a higher landed cost and with logistical delays,” Ritolia said in a note.
