New Delhi, June 23 (IANS): As geopolitical tensions mount in the Strait of Hormuz, major suppliers Saudi Arabia and Russia have stepped in to reassure India of uninterrupted crude oil deliveries. According to a report released Monday by Yes Securities, these nations’ diversified export routes and India’s shifting import strategy together mitigate the risk of a significant supply shortfall.
The report highlighted that India, which maintains crude reserves to cover approximately 90 days, is well-positioned to navigate potential disruptions. Saudi Arabia’s Petroline-Yanbu pipeline system allows crude exports to bypass Hormuz via the Red Sea, ensuring continued deliveries even if the strategic waterway is compromised. India currently sources about 18–20% of its crude oil from Saudi Arabia.
“While some logistical hurdles and higher shipping costs may arise, Saudi Arabia’s export infrastructure and India’s adaptable sourcing methods lessen the chances of a severe disruption,” the report noted.
Concerns over the Strait of Hormuz intensified after Iran’s Parliament approved a potential closure of the waterway in response to recent U.S. strikes on its nuclear facilities. The strait, through which more than 35% of India’s crude oil and 42% of its liquefied natural gas (LNG) flow, remains the world’s most crucial oil transit route.
India imports approximately 5.5 million barrels of crude per day, with 2 million barrels (or over 35%) transiting through Hormuz. However, the report stressed that India’s evolving energy procurement has significantly reduced its dependence on this corridor.
“Russian oil imports have now surpassed the combined volume from all Middle Eastern suppliers. June figures show India receiving 2.2 million barrels per day (mb/d) from Russia. Additional supplies from the U.S. (0.44 mb/d), Brazil, West Africa, and Latin America also bypass Hormuz entirely,” it added.
These alternate supply chains—via the Suez Canal, Cape of Good Hope, and Pacific Ocean—offer India greater flexibility. The report noted that India is well-positioned to scale up these imports if required.
Despite fears of a full closure of the strait, historical trends suggest such a move is unlikely. A complete blockade would severely impact Iran’s own oil exports—96% of which are routed via Kharg Island—and risk alienating China, its largest customer. It would also trigger international backlash and potential military retaliation.
Industry experts quoted in the report assess the probability of a total closure as “very low,” with possible disruptions limited to short-term interruptions lasting 24 to 72 hours. Nevertheless, such incidents could still drive oil price volatility, tighten tanker availability—already reflected in the decline of empty vessels bound for the Middle East—and introduce risk premiums in both crude and product markets.
India’s strategic diversification, backed by assurances from key suppliers like Saudi Arabia and Russia, offers a significant buffer against the ripple effects of regional instability in the Gulf.
