Oil and gas prices rose on Monday, with Brent crude up nearly 10% to $80 a barrel and European gas more than 40% higher, as wider conflicts in West Asia and attacks on energy facilities including Saudi Arabia’s Ras Tanura refinery and Qatar’s LNG plant caused production shutdowns.Also Read: India unlikely to hike petrol, diesel prices as global oil price rises to $80Tanker movements through the strait remained light for a second day on Monday, raising concerns about supply continuity and prompting officials and refiners to review repatriation options. Industry executives and oil ministry officials are examining supply and demand management measures.
LPG is very vulnerable
However, many believe that Iran may struggle to sustain military maneuvers and that any obstruction to transit through the strait would quickly become normal, the people noted above. But US President Donald Trump said that the war in West Asia may last for four weeks.
“We are constantly monitoring the changing situation, and all necessary steps will be taken to ensure the availability and viability of major petroleum products in the country,” said Oil Minister Hardeep Puri in X after the visit.Also Read: Trump’s Iran Attack Risks Wider West Asian War As Oil Prices Rise, Diplomacy Collapses
An important step being considered by the Indian government is to limit exports of petrol and diesel to boost domestic availability in the event of an emergency, the people said.
India exports a third of its petrol, a quarter of its diesel, and about half of its air turbine fuel (ATF) production. If necessary, the refiner can also transfer excess ATF to other product streams. The most immediate loser is LPG, where India relies on imports for nearly two-thirds of its consumption and maintains modest inventories. About 85-90% of LPG imports come from the Gulf.
Two weeks cover
Industry estimates suggest that stocks – including offshore inventories and cargo that has already passed through Hormuz – could cover less than two weeks if supplies are disrupted. In response, state-owned refiners Indian Oil, HPCL, and BPCL have started ramping up LPG production at select petrochemical integrated refineries.
Targeted demand management measures, including LPG rationing for consumers who have access to alternative fuels, especially in rural areas, are also being discussed, the people said.
India’s crude oil reserves can cover 17-18 days of consumption, about 20-21 days of refined fuels like oil and diesel, and about 10-12 days of LNG. In the absence of fresh arrivals via Hormuz, these buffers will steadily decrease. In recent months, the Gulf has accounted for half of India’s crude and LNG imports.
Boosting Russian oil imports to compensate for the loss of Gulf supplies is also being considered, the people said. A significant amount of Russian oil remains in the water and can be transported relatively quickly.
If global supplies tighten and prices rise sharply, Washington’s stance will soften, allowing Indian refiners to buy more Russian oil.
