India may cut oil product exports if Strait of Hormuz is blocked

Oil Minister Hardeep Puri

India is preparing to source crude oil from outside the Persian Gulf and cut its own refined-product exports should the Strait of Hormuz be blocked to ship traffic, Oil Minister Hardeep Puri said Thursday.

About a quarter of the world’s oil trade passes through the key waterway, which links the Gulf to the Indian Ocean. Some market watchers are concerned that Iran, locked in a conflict with long-time adversary Israel, could choose to attack tankers sailing through Hormuz or close the strait altogether.

“We have enough stocks” of crude and refined products, Puri told NDTV television. “We have enough diversified supplies” of crude, and “even if there were to be disruption, we can source it from alternate sources.”

Iran has previously threatened to close the strait in times of conflict, though there’s no sign of that happening so far. Of the 5.5 million barrels of oil India consumes every day, 1.5 million pass through the waterway, according to Puri.

“I don’t think this is something we are unduly worried about,” he said. There is ample crude available in the global market, which means it isn’t supply but prices that are a concern, he said.

Product Exports
India is a net exporter of petroleum products, with refiners such as Reliance Industries Ltd. and Nayara Energy shipping to countries including the United Arab Emirates, Singapore, the US and Australia. It could reduce those shipments if needed to maintain sufficient stockpiles at home, Puri said.

India’s product exports have averaged 1.3 million barrels a day so far this year, with Reliance and Nayara accounting for 82% of shipments, Kpler data show.