New Delhi, March 5 India is seeking assistance from the United States to secure maritime insurance for vessels transporting oil from the Middle East, as it looks for continuity in energy supplies beyond its current reserves.
The country has stocks in tanks, pipelines, and ships in transit to meet a 25-day requirement of crude oil—the raw material for making fuels like petrol and diesel—and a similar number of days' stock of finished fuel.
The ongoing conflict in West Asia has disrupted tanker traffic through the Strait of Hormuz—the narrow sea lane that carries about one-fifth of the world's oil and large volumes of liquefied natural gas (LNG).
India imports about 88 per cent of its crude oil and around half of its LNG, with 40-50 per cent of crude oil and 50-60 per cent of LNG shipments routed through this corridor, which is approximately 21 nautical miles wide at its narrowest point, with the shipping lanes even narrower—two 2-mile-wide channels separated by a 2-mile buffer.
"We are in a comfortable position right now," the official said, adding that shipments outside the Strait continue, and India is seeking suppliers in West Africa, Latin America, and the US to supplement any lost volumes.
The official said that the oil ministry is in discussions with major producers and traders to secure oil, liquefied petroleum gas (LPG), and liquefied natural gas (LNG).
"We are in contact with US authorities to obtain insurance coverage from the International Development Finance Corporation for vessels transiting the Strait of Hormuz," he said.
US President Donald Trump has ordered the multilateral financial institution to provide political risk insurance and financial guarantees for maritime trade in the region.
However, before the IDFC can do so, a corpus worth hundreds of millions of dollars must be established to provide the coverage, he added, noting that the insurance premium will of course be paid by the parties contracting the cargo.
The official said that India is looking to buy oil from all sources, including Russia, to replenish its crude oil stock.
The government is in talks with suppliers, including Sonatrach and Abu Dhabi National Oil Company, as well as global traders such as TotalEnergies, Vitol, and Trafigura, to secure additional oil and gas supplies.
Besides, imports of oil and cooking gas LPG have increased from the United States, he said.
While the oil stock position is comfortable, the closure of the Strait of Hormuz has reduced liquefied natural gas (LNG) supplies to India. This has resulted in gas supplies being cut to industries.
The official said that to deal with the situation, the government could re-prioritize gas allocation to ensure critical sectors receive the fuel they need.
India meets approximately half of its 195 million standard cubic metres per day (mmscmd) of natural gas consumption through imports. The disruption of shipping through the Strait of Hormuz and the force majeure declared by India's largest LNG supplier, QatarEnergy, has stopped the availability of about 60 mmscmd of gas.
Oil Minister Hardeep Singh Puri has discussed the evolving oil market situation with the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC), the official added.
