“This is the first time that the Strait of Hormuz has been blocked. Ships are currently not passing through the route due to the high risk. Our immediate plan is to diversify sources and buy crude oil that will not pass through Hormuz. We will also look at cargoes in safe waters,” said a refinery executive who did not wish to be named.
“Oil on water” refers to crude oil that has been loaded on a ship and is at sea but has not yet been delivered to the buyer at the destination port. After recent Western sanctions, the volume of such shipments has risen sharply. India’s oil marketing companies (OMCs) are also expected to draw on inventories, estimated at around 25 days.
On Monday, the Ministry of Petroleum and Natural Gas (MoPNG) said it would take all necessary steps to ensure the availability and affordability of major petroleum products in the country. In view of ongoing geopolitical developments in West Asia, the MoPNG reviewed the supply situation for crude oil, liquefied petroleum gas (LPG) and other petroleum products with senior officials from the government and state-run energy companies, it said in a post on X.
Queries sent to Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), Reliance Industries Ltd (RIL) and the oil ministry remained unanswered at the time of going to press.
Tensions in West Asia escalated on Monday after Iran launched retaliatory attacks following US- and Israeli-led military strikes that killed Supreme Leader Ayatollah Ali Khamenei. Crude oil prices jumped to around $80 a barrel in early trade on Monday, from around $72 a barrel at Friday’s close.
Qatar halted production of liquefied natural gas (LNG), prompting precautionary shutdowns of oil and gas facilities across West Asia. Qatari LNG output accounts for about 20 per cent of global supply and plays a major role in balancing demand in both Asian and European markets. Following a drone strike in the area, Saudi oil giant Aramco halted operations at the country’s largest refinery at Ras Tanura on the Persian Gulf coast, according to people familiar with the matter.
According to estimates by Yes Securities, the West Asia crisis poses serious energy security risks to India, with roughly 83 per cent of its LPG supply, around 51 per cent of its crude oil supply and 56 per cent of its LNG imports sourced via routes linked to Hormuz.
Cargoes from West Asia may have to take the longer Cape of Good Hope route to reach Indian shores as shipping firms avoid the Strait of Hormuz, the second executive said. “India would only receive one-fourth of the Gulf supply if the alternative route is taken. We do not expect the Strait of Hormuz to be closed beyond a few days. Nobody, including US President Donald Trump, would want that,” a third executive said.
Despite mounting tensions, executives said they were not actively considering greater reliance on Russian crude at this stage, primarily to avoid violating sanctions. “Every company has a risk appetite. Getting a Russian oil cargo which is clean in all aspects is a challenge. In the end, the onus comes on buyers,” an executive said.
Indian refiners, including HPCL, Mangalore Refinery and Petrochemicals Ltd, and HPCL-Mittal Energy Ltd, have not procured Russian crude in recent months. However, if the conflict escalates further, they may need to reconsider sourcing oil from Russia, an executive at one of the refineries said.
 "oil, refinery, crude oil, oil demand")
