India seen cushioned on oil spike, for now
India relies on diversified energy sourcing and could restrict exports of any refined petroleum product in case of domestic shortage, they added, asking not to be named.
The price the Indian basket soared by about 19% to $77.34 a barrel (of crude oil) on Friday as compared to little over $65 per barrel before the Israel-Iran war -- and the US bombing of Iran is likely to push prices further north -- but India's average crude oil price in the month of June (as on June 23) was $69.78 a barrel, which is still manageable, the officials said. State-owned oil marketing companies (OMCs) did make some additional profits when average crude oil prices were low, so they may absorb increases in international crude rates up to $80, they added.
Also Read | What is Strait of Hormuz that Iran may shut and how it will affect India
India is less dependent on the Gulf region for crude oil, the officials said. India now sources large quantities of crude from about 30 countries, including Russia, the US, South America and African nations.
To be sure, India still sources around 40% of the crude it imports from West Asia, and analysts say a closure of the strait could affect 40% of crude and 50-60% of LNG imports.
India is the world's third largest crude oil consumer after the US and China. It imported 232.7 million tonnes of crude worth $157.5 billion in 2024-25 . The country imports over 88% of crude oil it processes and also exports various refined products. Being a refinery hub in the South Asian region, India also exports surplus petroleum products such as aviation turbine fuel, petrol and diesel. In FY25, it exported 61 million tonnes of petroleum products worth $57.3 billion.
Also Read | Oil soars as Trump's attack on Iran ramps up risks to supplies
'If Iran closes the Strait of Hormuz, shortages could be met in the short-term through exports restriction,' one of the officials said. A longer closure could cause problems, though.
On cooking gas (also known as domestic liquefied petroleum gas), a second official said state owned firms such as Oil and Natural Gas Corp (ONGC), Gail India, Indian Oil Corporation and Bharat Petroleum Corporation are producing enough to meet the domestic requirements.
The second official acknowledged that India's LNG imports ' could be affected as about 60% of India's natural gas imports pass through Hormuz', but added that Iran was unlikely to close the strait because it would hit Iran's friends such as 'China, the most'.
'The impact would be largely on South Asia and Pacific regions such as China, Japan, India, Korea, Taiwan, Philippines and Singapore, who are major buyers of oil and LNG from West Asia' said SC Sharma, former officer on special duty at the erstwhile Planning Commission.
He added that India also has about 80 days of oil and oil products stored in different types of storages to sustain short-term supply blips.
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