There is huge turmoil in the global energy market due to the war between Iran and Israel. But amidst this global crisis, a relieving news is coming out from the Indian crude oil market. India has once again started purchasing that oil from Russia, on which America and Western countries had imposed strict restrictions.
India got 30 days’ Sanjeevani
In fact, after the decision of 30 days special exemption given by America, Indian refineries without wasting any time have started buying back the cargo of Russian crude oil already present in the sea. According to a report by Financial Express, Indian oil companies are now rapidly taking possession of those Russian consignments, which were loaded on ships before March 5 and sent out to sea. The thing to note is that it also includes oil of those specific companies, which were banned by many western countries including America itself.
Russia has the crown of number 1 supplier
From the year 2022 onwards, Russia remains the largest and most reliable supplier of crude oil to India. However, in the month of November last year, when stringent sanctions were imposed on major Russian oil companies like Rosneft and Lukoil, there was a slight interruption in India’s oil supply. Despite this, latest figures show that Russia still dominates the Indian market. According to tanker tracking data, in the month of February alone, Russia has supplied a huge supply of about 10.4 lakh barrels of crude oil to India every day. In this supply race, Saudi Arabia stood second with 10 lakh barrels and Iraq stood third with 9.8 lakh barrels.
The price of oil is determined by the Strait of Hormuz.
The ongoing tension between Iran and Israel in West Asia has had a direct impact on the security of the Strait of Hormuz. This is the narrow sea route through which millions of barrels of crude oil from around the world passes. The global market is scared due to the movement of ships being affected in this area, because stoppage of supply here directly means increase in prices at petrol pumps. However, it is a matter of relief that according to government sources, Iran has given diplomatic assurance of not targeting its neighboring countries. This gives rise to hope that the movement of commercial ships through this important sea route will soon return to normal.
End dependence on one market
Sensing global uncertainties and the risk of war, India has made a major change in its energy strategy. Now India is not completely dependent only on the Gulf countries. The government has heavily diversified the sources of crude oil purchase to reduce the risk. If we look at the government data, now about 70 percent of India’s oil is being imported through safe routes and countries outside the Strait of Hormuz, whereas till some time ago this share was limited to only 50 percent. Along with this, with the intention of further strengthening its energy security, India is now working on a plan to increase the import of LPG from America.