OIL Supply

The conflict in West Asia is no longer a distant geopolitical story. It is beginning to affect daily life in India. LPG supplies are being rationed, businesses are feeling the squeeze,

Union Petroleum and Natural Gas Minister Hardeep Singh Puri told Parliament on Thursday that India is not facing any shortage of crude oil or LPG, even as tensions in West Asia

The crude is being carried on 25 vessels, with grades such as Sokol on ships near China. There's also a number of tankers in the Arabian Sea that are mainly loaded with the medium-sour Urals blend

Government engages Tehran to ensure safe transit for Indian-flagged vessels amid West Asia conflict as concerns mount over oil, gas and fertiliser supplies

Iran's strikes continued even after its President Masoud Pezeshkian said he had instructed the military not to attack any nation that isn't striking the Islamic Republic

A prolonged conflict could ripple broadly across the global economy, threatening the energy supplies of countries halfway around the world and stoking inflation

India is expected to face oil price volatility and broader macroeconomic effects from the escalating Iran crisis, analysts said, adding the country's oil supply chain does not yet face structural insecurity. Rising tensions around the Strait of Hormuz - through which a significant share of India's crude and LNG imports transit - have already pushed Brent crude prices toward a seven-month high of USD 73 per barrel, adding a geopolitical risk premium to global energy markets and heightening inflation and current account pressures, even as physical supply disruption remains unlikely in the near term. "In the current escalation scenario, the initial impact is likely to be price-driven rather than volume-driven. A geopolitical risk premium would lift Brent prices, alongside increases in freight rates and war-risk insurance costs," said Sumit Ritolia, Lead Research Analyst, Refining and Modelling at commodity market analytic firm Kpler. Even in the absence of physical shortages, landed ..

OPEC+ is expected to extend its pause on oil production increases in March, even as geopolitical tensions and Iran-related risks push crude prices higher

Global inventories are expected to build by an average of 2.8 mbpd through the first half of the year, marking the largest surplus in recent memory

Tensions between Saudi Arabia and the UAE flared last month over a decade-long conflict in Yemen, when a UAE-aligned group seized territory from the Saudi-backed government

Forecasts from major energy bodies suggest a trend toward inventory builds and moderated prices, contingent on geopolitical stability and production policies

The halting of supply from the two Gulf exporters means Nayara, majority-owned by Russian entities including oil major Rosneft, relied entirely on Russia for its crude oil imports in August

The government has no say in where the country's refiners source oil from because these are commercial transactions, the official reiterated

Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries, pumping 3.2 million barrels per day in January, according to a Reuters survey of OPEC output

Widened sanctions on Moscow by western countries including the United States have roiled global oil trade and forced buyers of discounted Russian crude to find new ways to maintain their purchases

Weak demand, particularly in top importer China, and non-Opec+ supply growth were two factors behind the move

At present, the prospects for oil are looking better for consumers like India despite the escalating hostilities

Global oil demand is experiencing its slowest growth since 2020, primarily due to weak demand from China and a drop in Russia's global oil supply

Demand growth to be driven by India, China

Prolonged OPEC supply cuts and international sanctions on Venezuela, Iran and Russia had already led to shortages of heavier crude