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NEW DELHI: With tensions rising between Iran and the US and fears of war looming, India has started exploring ways to secure its energy supplies.Iran has signalled the temporary closure of sections of the Strait of Hormuz, the narrow gateway linking the Gulf to the open seas, which witnesses nearly 20% of global crude movement. Any restriction on cargo movement through the Strait of Hormuz may impact India’s supplies of crude oil and liquefied natural gas (LNG) from Saudi Arabia, Iraq, the UAE, Kuwait, Qatar and Oman. India imports 90% of its crude requirement – nearly 5.5 million barrels per day (mbpd) – and more than 40% comes from West Asia through this narrow passage.If the Strait of Hormuz is closed, officials said, India may try to partially secure supplies through the 360-km Habshan-Fujairah strategic oil pipeline and the 1,200-km East-West crude oil pipeline that provides access to the Red Sea. While the former is operated by Adnoc and has the capacity to carry 1.5 mbpd, the latter is controlled by Aramco and has a capacity of 5 mbpd.Though India purchased nearly one-third of its crude requirement from Russia over last three years, recent trends show the share of oil from Moscow has started dipping. India’s crude purchases from Saudi have witnessed a six-year high this month. Officials said New Delhi has already diversified crude imports in the last few years and its strategic oil reserves may last up to 74 days. Energy expert Narendra Taneja said, “Our main worry is not the availability of crude, but that prices may go up globally.” Prashant Vasisht, senior VP and co-group head of corporate ratings agency ICRA, said, “For every increase of $10 a barrel, India’s annual import bill would rise by $13-14 billion.” Taneja, however, said the situation may not come to that pass and closure of the Strait of Hormuz would not be acceptable to the US and to the Gulf’s oil exporting countries.
