‘LPG well covered, crude not a problem’: How much energy supplies is India left with?
As the world continues to feel the heat of the ongoing crisis in the Middle East, India’s refiners have swiftly secured enough crude oil and LPG supplies to last till the upcoming weeks.According to sources cited by Reuters, Indian refiners have built up sufficient crude inventories to meet demand through at least August. On the LPG front, supplies are expected to remain comfortable until at least mid-July after refiners stepped up purchases from Abu Dhabi National Oil Co (ADNOC) and other suppliers in recent weeks.“We are well covered on LPG (liquefied petroleum gas) front at least till mid-July, and crude is not a problem,” a refinery source told the agency.According to the sources, Indian refiners have been buying crude oil and LPG cargoes from ADNOC through ship-to-ship transfers. ADNOC has been supplying crude from its storage facilities in Fujairah, Zirku and Das Island, as well as through transfers in the Fujairah-Sohar region and Malaysia. Most LPG cargoes, meanwhile, have been sourced from Sohar.Among the recent purchases, state-run Hindustan Petroleum Corp (HPCL) acquired 4 million barrels of Murban crude from the United Arab Emirates for August delivery. The cargoes were bought from Totsa, the trading arm of TotalEnergies, and Mercuria, trade sources said on Thursday. One source said the deal was struck at a premium of about 40 cents a barrel to the July Dated Brent benchmark.HPCL had also bought 2 million barrels of crude from Brazil and West Africa last week for processing at its 180,000-barrel-per-day Rajasthan refinery, traders said. Other refiners, including Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL), have similarly turned to spot tenders to procure crude in recent weeks.Meanwhile, the Middle East conflict has disrupted global energy supplies for over 100 days now. The crisis began back on February 28, when the US and Israel launched joint strikes on Iran. In retaliation, the country tightened its noose on the crucial Strait of Hormuz, straining shipments across the world.To deal with the supply disruptions, refiners in the country subsequently expanded purchases from Latin America and Africa, while also receiving some supplies from Saudi Arabia.At the same time, India and the UAE are advancing plans to expand strategic oil reserves as New Delhi seeks to strengthen its energy security amid ongoing geopolitical uncertainties in the Middle East.The two countries are working to fast-track the creation of 30 million barrels of strategic oil reserves, following memoranda of understanding signed during Prime Minister Narendra Modi’s visit to the UAE last month.India, the world’s third-largest consumer of energy, imports nearly 88% of its crude oil requirements.India’s ambassador to the UAE, Deepak Mittal, said efforts are underway to raise UAE-linked crude storage capacity in India to 30 million barrels from the current 5.8 million barrels. The increase is expected to be achieved through a combination of existing underground storage caverns and new infrastructure projects.The initiatives being implemented by New Delhi and Abu Dhabi also include the development of a framework for gas reserves, reflecting broader efforts to enhance long-term energy security.
