Union Petroleum and Natural Gas Minister Hardeep Singh Puri has reassured the nation that India is well-equipped to handle potential disruptions in oil supplies due to escalating tensions in the Middle East, particularly in light of Iran’s threat to close the Strait of Hormuz.
The minister’s remarks come as global energy markets brace for volatility following recent US airstrikes on Iranian nuclear facilities, prompting Iran’s parliament to approve a resolution to potentially block the critical maritime route.
Speaking to the press in Cork, Ireland, on June 22, Mr. Puri emphasized India’s proactive measures to ensure energy security. ‘Under the leadership of Prime Minister Narendra Modi, we have diversified our crude oil import sources over the past few years. A significant portion of our supplies no longer relies on the Strait of Hormuz,’ he stated.
The minister further noted that India’s oil marketing companies, including Indian Oil, Bharat Petroleum, and Hindustan Petroleum, maintain reserves sufficient for several weeks and continue to receive energy shipments through multiple global routes.
The Strait of Hormuz, situated between Iran and Oman, is a vital chokepoint through which approximately 20% of the world’s oil trade flows, including exports from major producers like Saudi Arabia, Iraq, Kuwait, and the UAE.
India, the world’s third-largest oil importer, relies on imports for over 85% of its crude oil needs, with around 1.5 to 2 million barrels per day transiting through the Strait out of a total of 5.5 million barrels consumed daily. However, Minister Hardeep Singh Puri highlighted that India’s diversification strategy has reduced its dependence on this route, with nearly 40% of its crude oil now sourced from Russia, alongside increasing imports from the United States, Brazil, and West African nations.
‘We have been closely monitoring the geopolitical developments in the Middle East for the past two weeks,’ Mr. Puri said in a post on X on June 22. ‘Our government is committed to ensuring both the stability and affordability of fuel supplies for our citizens.’ He added that the Modi administration has, over the years, built a robust energy infrastructure, including strategic petroleum reserves with a capacity of 5.08 million metric tonnes across facilities in Pudur, Visakhapatnam, and Mangalore, with an additional reserve under construction at Chandikhol.
Industry analysts have cautioned that a prolonged closure of the Strait could lead to a spike in global oil prices, potentially pushing crude above $105 per barrel, which might prompt the Indian government to consider revising excise duties on fuel to mitigate consumer impact. However, Minister Puri remained optimistic, stating, ‘There is ample oil available in global markets, and our diversified import strategy, coupled with domestic production, positions us to weather any potential disruptions.’
The minister also revealed that Prime Minister Modi has engaged in diplomatic efforts, including a 45-minute conversation with Iranian President Masoud Pezeshkian on June 22, urging de-escalation and emphasizing the importance of dialogue to stabilize the region. While acknowledging the potential for increased insurance costs and shipping delays due to heightened risks, Mr. Puri stressed that India’s energy supply chain remains resilient.