Hormuz wobbles, Russia wins as India tweaks oil bets
Live Events Hormuz disruption reshaped India's energy sourcing LPG likely to recover first Russia remains central to India's crude strategy Venezuela, Atlantic Basin gain importance
Live Events Hormuz disruption reshaped India's energy sourcing LPG likely to recover first Russia remains central to India's crude strategy Venezuela, Atlantic Basin gain importance US emerges as alternative LPG supplier as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India's crude oil imports from Russia climbed sharply in June, while purchases from the United Arab Emirates remained close to record highs, as refiners moved to secure supplies amid lingering uncertainty around shipments through the Strait of Hormuz, according to data from maritime intelligence firm Kpler and industry analysts.Data from Kpler showed India imported an average of 2.66 million barrels per day (bpd) of crude oil from Russia between June 1 and June 19, up from 1.91 million bpd in May. The increase further strengthened Russia's position as India's largest crude supplier.Imports from the UAE stood at 636,000 bpd during the same period, only slightly below the record 644,000 bpd imported in May. Venezuela emerged as India's fourth-largest crude supplier with shipments of 209,000 bpd, behind Saudi Arabia, which supplied 384,000 bpd.In contrast, imports from the United States declined sharply to 91,000 bpd in June from 252,000 bpd in May.The latest import trends reflect efforts by Indian refiners to diversify sourcing and maintain supply security during a period of disruption in global energy markets. Russian crude has continued to attract buyers because of discounted prices, while additional supplies from the UAE helped offset concerns over shipments moving through the Strait of Hormuz.India, the world's third-largest importer of energy, relies heavily on the Gulf region for crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG).Energy flows were disrupted after Iran shut the Strait of Hormuz following military action involving the United States and Israel.
The waterway is one of the world's most critical energy chokepoints, carrying around one-fifth of global oil consumption and serving as the main export route for major Gulf producers including Saudi Arabia, Iraq, Kuwait, the UAE and Qatar.Shipping activity through the strait began recovering late last week after the US and Iran agreed to a ceasefire. However, concerns over the durability of the arrangement remain after Iranian officials accused Israel of violating the truce.According to Sumit Ritolia, Senior Manager - Modelling at Kpler, the reopening of the Strait of Hormuz is expected to have varying effects across energy commodities, with LPG likely to benefit first."A reopening of the Strait of Hormuz (SoH) would represent a major milestone for global energy markets, but the impact on India is likely to vary significantly across commodities," he said."While India remains one of the largest importers of Middle Eastern hydrocarbons (crude, LPG, and LNG), crude and LNG imports have proven relatively resilient throughout the disruption, unlike LPG, which has been the most severely affected."Ritolia said LPG supplies were hit hardest during the disruption, while crude oil and LNG imports proved more resilient because buyers were able to tap alternative suppliers and shipping routes.He expects recovery to occur in phases."Under our base case of a gradual reopening from early July, the initial focus will be on clearing trapped cargoes and restoring shipping flows before Gulf exporters can materially increase exports," he said.According to Ritolia, LPG shipments are likely to normalise first, followed by LNG and then crude oil imports.India imports around 88 per cent of its crude oil requirements, nearly half of its natural gas demand, and roughly 65 per cent of its LPG consumption.Before the Hormuz disruption, Gulf producers supplied about half of India's crude imports, nearly two-thirds of its LNG needs and close to 90 per cent of LPG imports.Recent signs of recovery have already emerged.
The BriefWire