West Asia troubles may exacerbate: Oil minister Hardeep Singh Puri

Oil Minister Hardeep Singh Puri said India has navigated the crisis so far, but closure of key chokepoints could create supply challenges if the conflict escalates

The ongoing West Asia crisis has the potential to exacerbate as tension amid the US and Iran has escalated in recent weeks, said Hardeep Singh Puri, Union minister of petroleum and natural gas, on Thursday. India has successfully navigated the ongoing crisis so far, but escalating conflict might pose challenges going forward, the minister added. 

“The crisis is certainly not over. It is not only ongoing, but it has the potential to exacerbate. Every crisis also presents itself as a challenge, and an ingrained opportunity. We have been able to successfully negotiate and navigate our way, and insulate ourselves from the worst part of the crisis thus far. Having said that, I cannot say that if the crisis exacerbates, we can still continue,” said Puri at the Public Affairs Forum of India (PAFI) 13th Annual Forum. 

 

Availability of crude in the international market was not an issue for India as the global supply of 102 million barrels per day (bpd) exceeds demand of 94-95 million bpd. However, closure of chokepoints including the Strait of Hormuz and Bab-el-Mandeb amid the West Asia crisis would create supply challenges, said Puri. 

India’s robust refining capacity at 267 million tonnes per annum (mtpa) helped ensure fuel availability in the country despite supply challenges at the peak of the war, said Puri. The refining capacity is expected to be ramped up to 320 mtpa by 2030.

 Countries including Saudi Arabia and the United Arab Emirates (UAE) are also interested in investing in India’s upcoming refineries, subject to meaningful investment returns. “Nobody wants to come and invest in a refinery ??unless they can 

also get a slice of your growing downstream market,” said Puri. 

India is also exporting around 1 million barrels of refined fuel products, despite several countries such as Russia and China imposing export bans. India plans to continue exporting petroleum products under contractual commitments, the minister said.

Addressing concerns about ethanol blending with petrol, Puri said the government does not plan to increase blending beyond 20 per cent amid growing consumer worries.