No Immediate Oil Supply Disruption For India Despite Middle East Tensions

ENA Global 2026-03-02 14:51:49 New Delhi, Mar 2 (KNN) India is unlikely to face immediate disruption in oil supplies despite Irans reported closure of the Strait of Hormuz, officials said, citing adequate crude and fuel inventories. Refineries currently hold 10 15 days of crude stocks, both in tanks and in transit, while fuel inventories can meet 7 10 days of demand. Strategic petroleum reserves can cover about a weeks requirement. Officials said the country has contingency plans should tensions escalate following US and Israeli strikes on Iran, reported PTI. Exposure to Hormuz Route About 2.5 2.7 million barrels per day—nearly half of Indias crude imports—pass through the Strait of Hormuz, largely from Iraq, Saudi Arabia, the UAE and Kuwait, according to Kpler data. Around 60 per cent of liquefied natural gas (LNG) imports and almost all LPG shipments also transit the route. India imports nearly 88 per cent of its crude oil and about half of its natural gas needs. Officials said a short disruption would have limited impact, but a prolonged blockade could pressure LPG and LNG supplies. Unlike crude, most LNG volumes are tied to long-term contracts, leaving limited flexibility in the spot market. Price Impact and Alternatives The immediate effect has been on prices. Brent crude closed near seven-month highs at around USD 73 per barrel after rising roughly 16 per cent this year. Analysts warned prices could approach USD 80 per barrel if supply flows are disrupted. Officials said India can recalibrate imports, including increasing purchases from Russia or sourcing crude from regions such as Africa, Venezuela and Brazil. However, longer transit times—up to a month from Russia compared with about five days from West Asia—require advance planning. Sumit Ritolia, Lead Research Analyst, Kpler, said Indias renewed reliance on Middle Eastern crude increases short-term Hormuz risks, with any escalation likely to raise oil, freight, and insurance costs, though the risk of a supply disruption remains low. He added, Diversified sourcing, Russian optionality and layered inventory buffers - including strategic petroleum reserves and commercial stocks - materially reduce the risk of sustained physical shortages. The principal near-term vulnerability is therefore price volatility and macro impact, not structural supply insecurity. The government said it is closely monitoring the evolving situation and preparing alternatives as needed. (KNN Bureau) 45327 https://knnindia.co.in/news/newsdetails/global/no-immediate-oil-supply-disruption-for-india-despite-middle-east-tensions 2026-03-02 14:51:49 knnindia.co.in No Immediate Oil Supply Disruption For India Despite Middle East Tensions