New Delhi: Amid the Iran crisis, the supply of crude oil through the Strait of Hormuz has been disrupted. Trump has made it clear that this war can last for about a month. This means that there could be a major disruption in the global supply chain of crude oil. Due to which an increase in tension in the global economy may be seen. But India has no such tension at all. India has so much stock of crude oil that no one can destroy it for 45 days. This means that disrupted supply of crude oil cannot stop the country’s progress. Let us also tell you what kind of data has come out regarding crude oil.
According to the assessment of energy market analysis firm Kpler, in case of disruption in the supply of crude oil through the Strait of Hormuz amid the Iran crisis, India has reserves of crude oil sufficient to meet the needs of about 40-45 days. According to Kepler, India has a stock of about 100 million barrels of commercial crude oil. This includes stocks held by refineries, underground strategic petroleum reserves and oil loaded on ships heading towards the country. India imports about 88 percent of its crude oil requirement. More than half of the total imports come from West Asia and a large part of it passes through the Strait of Hormuz. On an average, India imports about 50 lakh barrels of crude oil per day, out of which about 25 lakh barrels of oil comes through the Hormuz route per day.
Kpler’s chief research analyst Sumit Ritolia said that if oil supply from West Asia stops temporarily, the immediate impact will be on the supply system and prices. However, refineries generally maintain commercial reserves and the arrival of oil carriers that have already departed will provide short-term relief. However, Ritolia said that if the disruption continues for a long time, the pressure will increase due to the cost of oil imports, transportation expenses and alternative routes. The price of global oil standard Brent crude has crossed $80 per barrel, which is about 10 percent more than the level before the Iran crisis started. India had spent $137 billion on crude oil imports in the last financial year. Even in the April-January period of the current financial year, $100.4 billion has been spent on the import of 206.3 million tonnes of crude oil.
According to media reports, traffic through the Strait of Hormuz has been affected due to the conflict breaking out in West Asia. This 33 kilometer wide sea route connects the Persian Gulf to the Arabian Sea and about one-third of the world’s seaborne crude oil exports and about 20 percent of the gas supply passes through this route. Analysts say that India can compensate for this shortfall by taking additional supplies from West Africa, Latin America, America and Russia. Apart from this, if needed, we can also turn to Russian oil. According to experts, the immediate risk is more of price volatility and rising import bill than physical shortage. However, if the disruption is prolonged and severe, the possibility of a significant increase in the oil import bill and macroeconomic pressure cannot be ruled out.