If Iran closes the Strait of Hormuz, Saudi Arabia and Russia may opt for another route to supply crude oil to India. India imports 18-20 percent of its total crude oil requirement from Saudi Arabia.Saudi Arabia can use the Petroline-Yanbu corridor to supply crude oil to India if the Hormuz route is blocked. India currently has crude oil reserves for 90 days.
While crude oil arriving through this corridor may introduce some logistical constraints and higher freight costs, Saudi Arabia’s use of diversified export infrastructure is likely to mitigate any sharp supply shortages, Yes Securities reported. India imports more than 35 percent of its crude oil needs through the Strait of Hormuz, while 42 percent of LNG also comes through this route. If this route is closed, then in the near future there will be a risk of delay in supply and increase in freight.
In June, India imported 2.2 million barrels of crude oil per day from Russia. This is more than the total supply of crude coming from all the countries located in West Asia. Apart from this, India also imports oil from America, South America and West Africa and the oil coming from these countries does not come through the Strait of Hormuz. Therefore, experts believe that the closure of the Strait of Hormuz will not have much impact on India’s supplies. The report also says that if Iran closes the Strait of Hormuz, it will suffer the biggest economic loss. China is the biggest buyer of its oil.
About 100,000 tonnes of Basmati rice destined for Iran is stuck at Indian ports. Satish Goyal, president of the All India Rice Exporters Association, said Iran accounts for 18-20 per cent of total Basmati rice exports. Goyal said ships are stuck at Kandla and Mundra ports in Gujarat as neither ships nor insurance are available for Iran-bound cargo due to the conflict in West Asia. International conflicts are not usually covered under standard shipping insurance policies, he said. Shipment delays and uncertainty over payments can cause serious financial stress, he said.
He said that the prices of Basmati Chawal have already fallen by four to five rupees per kg in the domestic market. The association is in touch with agri-export promotion body APEDA on the issue. A meeting is scheduled with commerce and industry minister Piyush Goyal on June 30 to discuss the crisis, he said. Iran is India’s second largest basmati rice market after Saudi Arabia. India exported about 1 million tonnes of aromatic rice to Iran during the financial year 2024-25, which ended in March.