Middle East Conflict Sparks Crude Sourcing Fears Amidst Tight Oil Markets
Indian refiners are using inventories to manage immediate oil supply disruptions caused by the ongoing Middle East conflict.
The situation has worsened, with a prolonged closure and widening conflict threatening crude sourcing and increasing costs for Indian refiners.
Attacks on Russian ports have disrupted crude exports, and falling global oil inventories have reduced the buffer available to absorb further supply shocks.
The Iran-aligned Houthis are obstructing Saudi oil shipments through the Red Sea route, compounding the obstruction of the Strait of Hormuz oil transit.
Nikhil Dubey, lead analyst at analytics firm Kpler, said that any further disruption to Saudi barrels would remove more supply from an already tight physical market, leaving buyers competing for an increasingly limited pool of alternative crude.