India’s proactive measures and infrastructure development over the past decade played a crucial role in effectively managing the recent Middle East crisis. The country’s diversified crude oil sourcing, now spanning 41 countries, including newer suppliers like Libya and the United States, has bolstered its resilience. Strategic reserves totaling about 5.33 million tonnes, along with ongoing expansions, ensure a robust cover of roughly three weeks.
The shift in routing has reduced India’s reliance on the Hormuz route for crude oil transportation. Despite challenges, India maintained uninterrupted petroleum product supplies through the crisis. Additionally, the significant achievement of achieving 20% ethanol blending has helped reduce crude imports substantially.
Crude oil prices have stabilized around $74 post-crisis, with tanker traffic through the Strait gradually recovering. While a full restoration of traffic flow may take time, the worst of the supply disruptions is believed to be over. The government’s interventions, including a reduction in central excise duty on petrol and diesel, helped mitigate the impact on consumers, with India witnessing one of the lowest pump-price increases among major economies.
The swift response to the LPG supply disruption showcased India’s resilience. Within days of the crisis, domestic production of LPG was ramped up significantly to bridge the import shortfall. Price protections ensured that consumers were shielded from the surge in import-linked costs, with regulated prices maintained for households and beneficiaries of the Pradhan Mantri Ujjwala Yojana. As the supply situation improved, the government lifted restrictions on commercial and bulk LPG, restoring non-domestic supplies to pre-crisis levels.
