New Delhi:
India is closely tracking oil trends after reports indicated Iran plans to close the Strait of Hormuz following the US attack on three nuclear sites. The Strait is a key shipping route, through which a fifth of global oil and gas supply flows.
Here are 5 points on this important story
- We have been closely monitoring the evolving geopolitical situation in the Middle East since the past two weeks, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said. “Under the leadership of PM Narendra Modi ji, we have diversified our supplies in the past few years and a large volume of our supplies do not come through the Strait of Hormuz now.”
- “Our oil marketing companies have supplies of several weeks and continue to receive energy supplies from several routes. We will take all necessary steps to ensure stability of supplies of fuel to our citizens,” the Union Minister said in a post on X.
- However, oil and gas being an “extremely sensitive” sector, even limited disruptions can significantly increase global crude prices, sources told NDTV Profit. If the closure of the Strait of Hormuz continues for “over a week”, it will jolt the global economy and India is also exposed to potential fallout, sources said.
- “We think the situation will be short-lived and may return to normalcy,” a source familiar with the matter said. India has been importing crude from Russia, but the advantages depend on discounts and price trends.
- The government may consider reviewing excise duty cuts on fuel in case crude oil breaches the $105 per barrel level, sources said.
