Russia on Tuesday claimed that India has signalled “renewed interest” in importing larger volumes of Russian crude oil as disruptions mount in global energy supplies following the closure of the Strait of Hormuz after US and Israeli strikes on Iran.
The Strait of Hormuz, the world’s most critical oil shipping chokepoint, has been facing disruptions after Iranian actions in response to the strikes.
Moscow sees fresh demand from India
“Yes, we are getting signals of renewed interest from India,” Russian deputy Prime Minister Alexander Novak told state-run Rossiya 1 TV on the sidelines of an event in Moscow, according to news agency PTI.
Novak, who oversees Russia’s energy sector, also did not rule out the possibility that the European Union could reconsider its decision to curtail imports of Russian hydrocarbons in view of the unfolding energy crisis.
Nearly a fifth of the world’s oil supply and a significant share of liquefied natural gas exports pass through the narrow waterway linking the Persian Gulf with global markets.
Any prolonged restriction on traffic threatens to disrupt supplies to major importers such as India, China and Japan, and could push up global crude prices.
Discounts to Asian buyers may narrow
According to Russia’s NTV channel, owned by energy giant Gazprom, the escalation of hostilities and Iran’s strikes on oil and gas infrastructure in Gulf countries could help Moscow reduce the “deep discounts” it has been offering to Asian buyers, including India.
Russia has been India’s largest crude supplier in recent months, although the gap with Saudi Arabia narrowed earlier this year.
Russian supplies to India stood at a little over 1 million barrels per day (mbd) in February, compared with 1.1 mbd in January and 1.2 mbd in December.
Saudi Arabia emerged as a close second in February, with supplies rising 30 per cent to over 1 mbd, the highest import level from the kingdom in nearly six years, as per data from Kpler.
India monitoring Gulf crisis closely
Amid the escalating crisis, Russia has indicated it is ready to support India with energy supplies in case of disruptions arising from the Middle East tensions, Reuters reported.
Iran has targeted oil refineries and production sites across the region in retaliatory strikes and closed the Strait of Hormuz for commercial activities, with its Islamic Revolutionary Guard Corps warning that any ship passing through could be set on fire.
India, however, has sought to reassure markets about its preparedness.
Petroleum and natural gas minister
Hardeep Singh Puri said on Tuesday that the country has sufficient reserves of crude oil and petroleum products to manage short-term disruptions.
“The trilemma of energy availability, affordability and sustainability continues to guide India’s approach, focused on meeting the energy requirements of our citizens,” Puri told the media.
Adequate stocks, diversified sourcing
According to ANI, India holds about 25 days’ worth of crude oil and 25 days’ worth of petrol and diesel stocks, amounting to roughly eight weeks of total inventory. Only about 40 per cent of India’s crude imports transit through the Strait of Hormuz, while the remaining 60 per cent comes from other sources.
Also read| India’s energy security exposure to Middle East: How much oil, LPG, LNG reserves do we have?Indian energy firms continue to import Russian crude under existing contracts, providing an additional buffer.
Nearly 2.5–2.7 mbd of India’s crude imports transit the Strait of Hormuz, largely sourced from Iraq, Saudi Arabia, the UAE and Kuwait. With cargo movements from West Asia disrupted, Indian refiners have started exploring alternative sources.
The ministry of petroleum and natural gas has set up a 24×7 control room to monitor fuel stocks and supply positions nationwide, and public sector oil marketing companies are maintaining adequate inventories.
Government sources said India’s priorities remain uninterrupted fuel availability, protection of consumer interests and the well-being of nearly one crore Indians living and working in the Gulf region.