There is great turmoil in West Asia at present. The conflict that broke out between Israel, America and Iran since February 28 has left energy markets around the world breathless. This war could have had a direct impact on India also, because about 88 percent of our oil requirement is met by imports. Whenever the supply of oil stops at the international level, the general public starts fearing the rising prices and shortage of petrol and diesel. But, this time the diplomacy of the Government of India and the foresight of our refineries have not only rescued the country from a major energy crisis, but have also set a strong example for the world.
Supply halted in Gulf countries, sea routes blocked
The ‘Strait of Hormuz’ located between Iran and Oman is considered the lifeline of the world’s oil trade. One-fifth of global oil passes through here. But since the beginning of March, the movement of ships on this important sea route has almost come to a standstill. Due to this, there has been a huge decline in the consignment of crude oil coming to India from countries like Iraq, Saudi Arabia, UAE and Kuwait. According to data from commodity market analytics firm Kpler, imports from Iraq and UAE have declined by 69.2% and 72.8% respectively in March. The supply from Saudi Arabia and Kuwait has also reduced to almost half.
Russia became the biggest savior
In this difficult time, India showed unprecedented speed and reshaped its strategy. To compensate for the loss of oil from West Asia, India immediately turned towards Russia. As a result, between March 1 and 25, oil imports from Russia jumped by a whopping 82.3% to a record high of 1.9 million barrels per day. The share of Russian oil in India’s total imports which was only 20.1% in February, has now increased to 45.2%. Indian refineries, wisely, have already purchased 60 million barrels of Russian crude oil for delivery till April. It is the result of India’s strong system that despite such a huge disruption, there was no impact on oil production in the country.
America also had to accept India’s strength
In this entire incident, a big victory has also been seen on the diplomatic front. Till some time ago, America was pressurizing India not to buy Russian oil during trade talks. But after the closure of the Strait of Hormuz the situation completely reversed. In view of the elections to be held in America this year, the Trump administration does not want to allow global oil prices to rise at any cost. Therefore, Washington has given India a special waiver to buy Russian oil. This shows that India is fully capable of taking independent decisions for its energy security and even the superpowers have to respect India’s national interests.
Will petrol and diesel become expensive?
Due to Iran war, there is only one question in everyone’s mind that will petrol and diesel become expensive? It is a matter of relief that due to India’s strong infrastructure the domestic market is completely safe. Although India’s total imports have declined by about 8 lakh barrels per day compared to pre-conflict levels (January-February), Indian oil companies have made best use of their commercial reserves. Due to this, the work of refineries is going on without any stop. Kepler experts clearly say that India’s system is very flexible. There is no immediate risk to fuel supply in the country.