India's crude oil supplies secure amid Middle East crisis: Hardeep Puri

Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, has unequivocally stated that India's crude oil supplies remain secure and domestic LPG availability is fully protected, even amidst the escalating conflict in the Middle East and the effective closure of the Strait of Hormuz to commercial shipping. Puri made this assurance in the Lok Sabha on Thursday, March 12, 2026, addressing concerns over potential energy shortages. He emphasized that the current pressure in some areas is due to consumer anxiety and panic buying, rather than any actual supply failure or production shortage. According to Puri, India has proactively diversified its energy sourcing, significantly reducing its dependence on the Strait of Hormuz. Non-Hormuz sourcing now accounts for approximately 70% of India's crude imports, a substantial increase from the 55% recorded before the conflict began. This diversification strategy, built over successive years, has expanded India's crude oil sources to about 40 countries, up from 27 in 2006-07, providing the country with considerable supply flexibility. The Minister highlighted that India's refineries are operating at high capacity utilization, in some cases exceeding 100%, to ensure consistent availability of petroleum products. He affirmed that there is no shortage of petrol, diesel, kerosene, Aviation Turbine Fuel (ATF), or fuel oil, and that retail outlets across the country are well-stocked with functioning supply chains. Puri also noted that LPG production has increased by 28% through refinery directives, and further procurement is underway, ensuring domestic LPG supply is fully protected. The booking-to-delivery cycle for domestic LPG cylinders remains at approximately 2.5 days, with uninterrupted priority supply to essential services like hospitals and educational institutions. Demand-management measures, including a minimum booking gap, are also in place to prevent diversion and manage consumption. Puri underscored the unprecedented nature of the current global energy situation, stating that "the world has not faced a moment like this in modern energy history." The disruption in the Strait of Hormuz, through which approximately 20% of the world's crude oil, natural gas, and LPG flows, has been described as the largest supply disruption in the history of the global oil market, surpassing even the crises of the 1970s. Despite India's lack of involvement in the conflict, it, like many other nations, must navigate its consequences. However, India's strategic moves, including its diversified import basket and robust domestic production, have placed it in a more resilient position compared to other countries facing severe energy crises. Several reports corroborate the Minister's statements. India has indeed been increasing its purchases of Russian crude oil, facilitated by a temporary US waiver, to offset supply disruptions from the Middle East. While about 45% of India's crude imports previously transited through the Strait of Hormuz, this figure has now reduced to about 30% or less. The arrival of tankers like the Liberia-flagged Shenlong carrying Saudi crude in Mumbai, despite the risks in the Strait of Hormuz, further demonstrates the continued, albeit more challenging, flow of oil. The International Energy Agency (IEA) has warned of the largest supply disruption in history due to the Middle East war, with Gulf states' oil output reduced significantly. The geopolitical tensions have led to a surge in Brent crude prices, exceeding $100 per barrel. Economically, disruptions in the Middle East pose risks to India's current account deficit, inflation, and the rupee's value, with estimates suggesting a $10 increase in Brent crude could widen the deficit by 0.3-0.4% of GDP. However, India's diversified sourcing, including from the US, Norway, Canada, Algeria, and Russia, and its high refinery utilization rates, are crucial mitigating factors. The country also maintains underground strategic petroleum reserves, holding about 10 days of national requirement, offering a temporary cushion.

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