The Standard & Poor’s Global Commodity Insights website quoted the head of the Indian Petroleum Industry Association as saying that India is unlikely to face a major disruption in oil flows despite the escalating crisis in the Red Sea region, because it will be able to overcome the turbulent conditions due to its strategy of enhancing its oil purchases from the Middle East while maintaining the flow of Russian oil exports.
The Indian official said on the sidelines of the Indian Energy Week conference in Goa that India’s imports of crude oil coming from Iraq, Saudi Arabia, the UAE and Kuwait were not affected as a result of the use of open sea lanes in the Arabian Gulf, reports Al-Rai daily.
As for India’s demand for Russian oil, he stated that it remains flexible despite the threats from the Red Sea, explaining that despite the recent crisis in the Middle East exacerbating concerns about diversion of oil supplies and higher shipping costs, this is unlikely to lead to obstruction of energy supplies to India.
He stated that the global oil market was afraid of diversion of supplies and higher shipping costs, but the Indian government was confident of dealing with the problem to ensure the uninterrupted flow of oil to its refineries.
It is worth noting that more shipping companies are avoiding the Red Sea and the Bab al-Mandab Strait after a US-led coalition launched strikes on the Iranian-backed Houthis in northern Yemen, which raised fears of an additional escalation that could affect the main maritime trade routes.
The website pointed out that any new insurance policies for the Red Sea lanes could add about a billion dollars or more to shipping costs.
