Amid mounting concerns about oil and natural gas shortages due to the escalating conflict in the Middle East and the closure of the Strait of Hormuz, the Indian government has assured that India has sufficient oil and gas stock and is in touch with other sellers globally.
According to an ANI report, the government said the country is in a comfortable position regarding energy security and oil and gas stock. The government stated that energy stock is being replenished every day.
As per the report, the government stated that there is no shortage of crude oil, LPG, or LNG worldwide, and that India is in touch with other suppliers in the global market.
Government presents options
According to the report, the government stated that India is in talks with major global oil producers and traders to purchase crude oil and natural gas. The government added that it is in talks with the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) with regards to its energy concerns.
Further, as per the report, the government has said that Australia and Canada have offered to sell gas to India, while the country is also looking for alternative sellers.
Reflecting on its recent diversification of energy purchases, the government stated that India has recently signed new purchase contracts with the United States and the United Arab Emirates.
The government said that India imports 195 MMSCMD of gas, of which Qatar supplies only 60 MMSCMD, and that India is also looking for alternative markets to buy gas.
“India is reviewing the energy situation twice a day.”, ANI quoted a government source.
Why is the market worried then?
While the government has assured diversification of oil and gas stocks and purchases, the current state of India’s purchase pattern and the closure of the Strait of Hormuz are creating anxiety in the market.
According to the analytics firm Kpler, nearly 50 per cent of India’s total monthly crude imports, along with 85 per cent of the LPG supply, moved through the Strait of Hormuz during January–February.
The data shows that India’s dependence on the route has increased in recent months after it decided to move away from higher Russian volumes and return to traditional Middle Eastern suppliers. Kepler data shows that Hormuz-linked imports rose to 2.6 million bpd in February (month-to-date), compared with 2 million bpd last year.