Strait Of Hormuz Crisis: India Banks On Russian And Saudi Oil To Avert Shortage
As geopolitical tensions rise in the Strait of Hormuz, Saudi Arabia’s ability to reroute crude exports through alternative corridors offers India a significant degree of supply security, according to a report released on Monday.
With India maintaining crude reserves sufficient for 90 days, Saudi Arabia’s Petroline-Yanbu export route through the Red Sea provides a reliable alternative should disruptions emerge in the Persian Gulf, reported IANS.
Currently, Saudi Arabia accounts for 18–20 per cent of India’s crude oil imports. The report by Yes Securities highlights that even if the vital Hormuz route becomes inaccessible, a substantial portion of these shipments can still reach Indian refiners through Saudi Arabia’s diversified export infrastructure. "Although some logistical constraints and higher freight costs may persist, Saudi’s diversified export infrastructure, combined with India’s flexible sourcing strategy, reduces the likelihood of a sharp supply shortfall from this key partner," the report stated.
India’s Growing Diversification Shields It from Full Impact
The recent developments follow Iran’s Parliament granting approval for a possible closure of the Strait of Hormuz after US military strikes targeted its nuclear facilities, amplifying concerns over supply chain stability in the region.
Given that more than 35 per cent of India’s crude imports and 42 per cent of its LNG supplies traverse the Strait of Hormuz, any prolonged disruption could lead to immediate consequences in freight rates and delivery timelines.
However, India’s increasingly diverse sourcing pattern has substantially bolstered its resilience. According to Yes Securities, “Russian inflows (2.2 million barrels of oil per day, or mb/d, in June) now exceed combined Middle East supplies, and additions from the US, West Africa, and Latin America bypass Hormuz entirely.”
India currently imports 5.5 mb/d of crude, with 2 mb/d — over 35 per cent — passing through the Hormuz chokepoint. Yet, since 2022, Indian refiners have successfully pivoted, with Russian imports now surpassing those from all Middle Eastern suppliers combined. The report further noted, “Additions from the US (0.44mb/d), Brazil, West Africa, and even Latin America offer alternate routes bypassing Hormuz via the Suez, Cape of Good Hope, and Pacific Ocean. India could ensure that supplies increase from Russia, the US and others.”
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Low Probability of Total Blockade but Volatility Likely
Despite mounting fears of a full-scale closure, the report underlined that Iran is unlikely to implement a complete blockade of the Strait of Hormuz. "Doing so would hurt its own crude exports (96 per cent routed via Kharg Island), alienate key partners like China (its largest buyer), and provoke coordinated military retaliation," the report observed. Experts have assessed the probability of a total shutdown as "very low," suggesting that any interruptions would most likely be brief, spanning 24 to 72 hours.
Nevertheless, even short-term disruptions could create significant market turbulence, tightening tanker availability and triggering immediate volatility in oil and product prices. The report pointed out that "these disruptions could still inject significant volatility, tighten tanker availability (already visible in the drop in Middle East and Gulf (MEG) bound empty tankers), and induce risk premiums in oil and product markets."
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