India may look at increasing Russian oil imports as flows via Hormuz dry up, Pg15

Key Highlights:

• India is considering increasing Russian crude oil imports due to disruptions in oil flows through the Strait of Hormuz.
• Approximately half of India's crude oil imports, or 2.5-2.7 million barrels per day (bpd), pass through the Strait of Hormuz.
• In February, India's Russian crude imports were 1.1 million bpd, a decrease from the 2025 peak of over 2 million bpd.
• The Ministry of Petroleum and Natural Gas (MoPNG) is monitoring the situation to ensure fuel availability and affordability.

Detailed Insights:

• The Strait of Hormuz is a critical global oil transit chokepoint, handling about one-fifth of global liquid petroleum consumption and LNG trade.
• Disruption in the Strait of Hormuz has led to trading houses and insurers suspending shipments, increasing the appeal of readily available Russian oil.
• Roughly 10 million barrels of Russian crude are estimated to be available in Asian waters due to reduced intake by Indian refiners.
• India possesses strategic petroleum reserves, along with crude and fuel inventories, to mitigate potential import shortfalls.
• India can accelerate spot procurement from non-Hormuz regions and strengthen supply contracts with countries like the US, West Africa, and Latin America.
• LPG imports are a significant vulnerability for India, as 80-85% of its needs are imported, primarily from Gulf suppliers via the Strait of Hormuz.
• A diversified sourcing strategy and alternative oil supplies in nearby waters can reduce the risk of a sustained supply crisis for India.

Key Concepts Involved:

• Strait of Hormuz: A narrow waterway between Iran and Oman, crucial for global oil and gas transit.
• Crude Oil: Unrefined petroleum, used to produce gasoline, diesel, and other fuels.
• LPG (Liquefied Petroleum Gas): A mixture of propane and butane, used as a fuel in heating appliances, cooking equipment, and vehicles.
• Strategic Petroleum Reserves: Stockpiles of crude oil maintained by a country to safeguard against supply disruptions.