India may cut oil exports if Strait of Hormuz is blocked: report

As military escalation between Iran and Israel continues, India may consider cutting down its petroleum product exports via the Strait of Hormuz, a maritime chokepoint between Iran and Oman, over the potential blockage scare, Bloomberg reported, citing oil minister Hardeep Singh Puri.

Iran has threatened that it could shut down the Strait of Hormuz in retaliation for US involvement in its conflict with Israel.

The Strait of Hormuz is the only sea passage that joins the Persian Gulf to the open ocean.

Puri said that if the situation escalates, India may cut its refined-product exports—currently averaging 1.3 million barrels per day—to prioritize domestic needs.

About 40% of India’s crude imports and over half of its LNG supplies pass through this marine waterway.

In such a case, India may turn to West African nations to mitigate potential supply shocks.

Top oil ministry officials and industry executives told Bloomberg that the government is evaluating scenarios and response strategies, including tapping into India’s strategic petroleum reserves.

Puri, however, added that India’s supply sources are sufficiently diversified to weather short-term disruptions.

Indian refiners like Reliance Industries Ltd and Nayara Energy collectively account for 82% of India’s product shipments to UAE, Singapore, the US, and Australia.

Blockage concerns have sent oil prices spiralling. According to analysts, a prolonged disruption may cause inflation in India’s oil import bill by as much as $14 billion.

Puri has voiced his concerns about oil price volatility and added that India can source crude from alternate suppliers if needed.