Saudi pipeline shut, Hormuz traffic plunges: How India is managing its oil flow from West Asia

The situation has become more complicated after drone attacks damaged Saudi Arabia’s East-West oil pipeline, which had provided an important alternative route for moving Saudi crude when shipping through Hormuz came under pressure.

Yet oil and other energy supplies continue to reach India through a combination of available cargoes, alternative routes and existing inventories. “We continue to receive energy supplies from that part of the world,” External Affairs Ministry spokesperson Randhir Jaiswal said.

Traffic through Hormuz remains extremely low. Only four vessels crossed the strait on Tuesday, down from seven a day earlier and well below the 10-day average of 18, Reuters reported. None of the four was a very large crude carrier or an LNG tanker.

Bab-el-Mandeb is also under pressure after Houthi attacks on Saudi assets. Twenty-two vessels crossed the strait on Tuesday, compared with 24 a day earlier.

For India, the immediate issue is therefore not a complete halt in oil supplies, but how long alternative supply arrangements can keep crude and other energy products moving, and at what cost.

How is West Asia oil still reaching India?

India’s biggest protection is that it does not depend entirely on crude travelling through Hormuz. The Ministry of Petroleum and Natural Gas said on March 3 that Indian energy companies had diversified their crude and petroleum-product procurement and had access to supplies that did not have to pass through the Strait of Hormuz.

“Such cargoes will remain available and help mitigate supplies that may be temporarily affected enroute through the Strait of Hormuz,” the ministry said.

The government also said India had crude oil and inventories of key petroleum products, including petrol, diesel and aviation turbine fuel, to manage short-term disruptions.

India has established a 24-hour control room to monitor fuel supplies and stocks across the country, according to the Petroleum Ministry.

That means a disruption at Hormuz does not automatically translate into an immediate shortage in India. Indian refiners can draw on existing stocks and source crude from suppliers whose cargoes do not depend on the strait.

But Saudi Arabia’s situation is making the supply chain more complicated.

Saudi Arabia is looking for alternatives

Saudi Arabia has traditionally used its East-West pipeline to move crude from its eastern oil fields and terminals to Yanbu on the Red Sea. From Yanbu, crude can reach international markets without passing through Hormuz. The route became particularly important after shipping through the strait was severely curtailed.

But Saudi Arabia shut the pipeline on Friday after drone attacks damaged it, Reuters reported.

The disruption has forced Saudi Aramco to look for other ways to move crude to overseas buyers. Aramco had offered additional crude cargoes to Asian refiners for loading through ship-to-ship transfers off Oman’s Sohar port, reported Reuters.

The grades offered include Arab Light, Arab Medium and Arab Heavy. The cargoes would be transferred outside the Strait of Hormuz, according to Reuters. Aramco had made at least two similar offers in recent weeks for Arab Medium and Arab Heavy crude.

Saudi Arabia has also increased crude loadings from its Ras Tanura and Juaymah terminals inside the Gulf.

Satellite tracking by Energy Aspects, cited by Reuters, showed daily loadings from the two terminals had doubled over the past week to about two very large crude carriers, equivalent to around 4 million barrels.

Kpler data cited by Reuters showed four VLCCs capable of carrying a combined 8 million barrels loading at Ras Tanura on Wednesday.

These cargoes do not mean Saudi Arabia has completely bypassed Hormuz, since Ras Tanura and Juaymah are inside the Gulf. They show instead that the kingdom is using multiple shipping arrangements to keep crude moving despite the disruption.

At least one Asian buyer with September cargoes scheduled to load at Yanbu had been told by Aramco that shipments would be delayed and rescheduled, reported Reuters. Some European customers were also informed that certain September-loading crude cargoes would be cancelled, while Yanbu loadings had been suspended.

What do Hormuz and Bab-el-Mandeb mean for India?

The two waterways create different risks. Hormuz is the main route for oil and gas leaving the Persian Gulf. Before the current conflict, it carried about one-fifth of the world’s oil and liquefied natural gas supply, according to Reuters.

Bab-el-Mandeb lies between the Horn of Africa and the Arabian Peninsula and connects the Red Sea with the Gulf of Aden and the Arabian Sea. Disruption there affects another major maritime route between the West Asia, Asia and Europe.

India has raised concerns over the security of both routes. Jaiswal said on Tuesday that India had condemned attacks on Saudi territory, including civilian infrastructure and economic assets.

“We are deeply concerned also with the escalation in the situation in the Red Sea region,” Jaiswal said, according to The New Indian Express report. He added that such attacks “undermine regional stability and threaten freedom of navigation through the Bab-el-Mandeb”.

India has also been monitoring the safety of commercial shipping and Indian seafarers.

Jaiswal said a Panama-flagged ship attacked off the coast of Oman had 14 Indian nationals on board. Thirteen had been rescued, while one Indian national remained missing as of September 15. India was working with Omani authorities on the search and rescue operation.

“Targeting commercial shipping, seafarers, civilians and civilian infrastructure in the region is unacceptable to us,” Jaiswal said, calling for “free and safe navigation and flow of commerce through international waterways in the region” to be restored.

Why hasn’t India run out of West Asia oil?

The key distinction is between availability of crude and ease of transporting it. India can still receive cargoes from suppliers whose shipments do not depend on Hormuz. Saudi Arabia is also exploring loading arrangements outside the strait, including ship-to-ship transfers off Sohar.

Existing inventories provide another buffer against short-term disruptions. But keeping supplies moving becomes harder if the disruption lasts.

Longer shipping routes can increase freight and insurance costs. Fewer available vessels can make transportation more expensive, while Asian refiners may compete for the same alternative cargoes.

That can raise the cost of imported crude even when physical supplies remain available.

Saudi Arabia’s East-West pipeline had provided an important bypass around Hormuz. Its shutdown removes part of that flexibility just as traffic through Hormuz remains extremely low and Bab-el-Mandeb faces security concerns.

For India, this creates a narrower margin for disruption. The country has diversified its crude sourcing and maintains inventories, which can help absorb a short-term shock. But those measures cannot completely insulate Indian refiners from higher global oil prices, freight rates or insurance costs if the disruption persists.

For now, however, the immediate picture is different from a complete supply stoppage. India is still receiving energy from the region.

The challenge is whether alternative routes, cargoes and inventories can continue to keep that supply flowing if pressure on Hormuz, Bab-el-Mandeb and Saudi export infrastructure lasts longer.