Hormuz Crisis: India Says Crude Stocks ‘Comfortable’ As Global Oil Supply Fears Rise

India currently holds adequate crude oil and fuel reserves despite supply concerns triggered by tensions around the Strait of Hormuz, reported ANI citing government sources, adding that the country is in a "comfortable position" on energy supplies and is preparing to source additional crude from alternative geographies if required.

The assurance comes at a time when global energy markets remain on edge following the closure of the Strait of Hormuz earlier this week amid escalating geopolitical tensions in West Asia. 

The narrow waterway is one of the world’s most critical oil transit routes, and any disruption typically raises immediate concerns for large importers such as India.

According to the news agency, India currently has enough crude oil, refined products and LPG reserves to manage short-term supply disruptions.

"Today, we have more energy sources than what is stuck in the Straits of Hormuz. We are in a comfortable position in crude oil, oil products and LPG," government sources said.

Officials also indicated that authorities are preparing contingency measures to offset any potential supply disruption from the region.

"In terms of our current stock, we are in a comfortable position. We are going to ramp up our supplies from other parts of the geographies and make up for our supply crunch from the Straits of Hormuz," the sources added.

Russia Emerges As A Key Supply Option

One of the key alternatives available to India is crude oil from Russia, which has become a significant supplier to the country in recent years.

The report noted that India has steadily increased purchases of Russian crude since 2022.

"We have been buying crude oil from Russia since 2022. In 2022, we were importing 0.2 per cent of total imports from Russia," the sources said.

By February this year, Russia’s share in India’s crude imports had risen sharply.

"In February, we imported 20 per cent of our total crude oil imports from Russia. In February, India imported 1.04 million barrels per day from Russia," the sources added.

The rise in Russian supplies has given Indian refiners additional flexibility when global energy flows face disruptions.

Refinery Operations Continue Normally

The news agency also dismissed reports suggesting operational disruptions at domestic refineries.

"News of the MRPL refinery shutdown is incorrect. MRPL refinery is very well stocked and has adequate stock," official sources told ANI.

Officials added that refineries are also taking steps to ensure sufficient supplies of cooking fuel.

"All the LPG refineries are directed to increase production of LPG. We are in a comfortable position with our LPG stock," the sources said.

Authorities are also planning to use petrochemical feedstock domestically to help manage consumption demand if required.

"We will use our petchem for domestic use to ease the consumption demand," the sources added.

Indian Refiners Buying Russian Oil

Parallel to these developments, Indian refiners have begun moving quickly to secure additional Russian crude cargoes, according to a report by Bloomberg.

Bloomberg reported that more than 10 million barrels of Russian crude have already been purchased by Indian refiners, citing people with direct knowledge of the deals.

Much of the buying activity may have taken place even before the United States announced a one‑month waiver allowing some flexibility for purchases.

Ship‑tracking data compiled by Bloomberg shows that around 15 million barrels of Russian crude are currently on tankers in the Arabian Sea and the Bay of Bengal, while another 7 million barrels are idling near Singapore.

Because these shipments are already relatively close to India, they could potentially reach Indian ports within about a week if refiners finalise purchases.

Additional cargoes travelling through the Mediterranean Sea and the Suez Canal are also reportedly heading toward the Indian subcontinent.

State‑Run Refiners Return To Market

Bloomberg reported that state‑owned refiners Mangalore Refinery and Petrochemicals Ltd. (MRPL) and Hindustan Petroleum Corp Ltd. (HPCL) have returned to the Russian crude market after several months of limited purchases.

Both companies had reportedly not bought Russian oil since December, according to people familiar with the transactions cited by Bloomberg.

The companies did not respond to email requests seeking comment, while India’s federal oil ministry did not immediately respond to a query regarding the US waiver.

Meanwhile, shipping analytics firm Kpler has reported that at least 18 vessels carrying Russia’s Urals crude grade are now signalling Indian ports as their destination.

Pricing Dynamics Changing In The Market

The renewed buying activity has also begun influencing prices for Russian crude.

According to people cited by Bloomberg, Indian refiners are currently paying a premium of $2 to $4 per barrel over Dated Brent for Russia’s flagship Urals grade on a delivered basis.

This represents a sharp reversal from last month, when Urals crude was trading at a discount of $15 to $20 per barrel below Brent as Indian refiners reduced purchases.

Analysts say stronger Indian demand could narrow discounts further if buying continues.

Imports May Rise Again

Russia had previously emerged as one of India’s largest crude suppliers following the reshaping of global oil flows after the Ukraine conflict.

Imports from Russia had reached more than 2 million barrels per day in mid‑2024, according to Kpler data.

However, purchases had fallen sharply earlier this year, with imports averaging around 1.06 million barrels per day last month, the lowest level since September 2022.

If refiners continue purchasing cargoes already floating in Asian waters, analysts say India’s imports from Russia could rise again in the coming weeks.