Puri Warns West Asia Crisis May Worsen, Pose Supply Challenges for India

India's Oil Minister Hardeep Singh Puri has warned that the ongoing crisis in West Asia could worsen, posing supply challenges to the country. Despite navigating the current situation successfully so far, the minister expressed concerns about the potential escalation of the conflict and its impact on global oil supplies.

Puri stated that India has been able to insulate itself from the worst part of the crisis, but warned that closure of key chokepoints such as the Strait of Hormuz and Bab-el-Mandeb could create supply challenges. The minister pointed out that the global supply of 102 million barrels per day (bpd) exceeds demand of 94-95 million bpd, but emphasized that India's robust refining capacity at 267 million tonnes per annum (mtpa) has helped ensure fuel availability in the country.

Puri also highlighted that countries like Saudi Arabia and the UAE are interested in investing in India's upcoming refineries, subject to meaningful investment returns. The minister noted that investors want a share of the growing downstream market, which is expected to increase with the expansion of refining capacity to 320 mtpa by 2030.

The oil minister also addressed concerns about ethanol blending with petrol, stating that the government does not plan to increase blending beyond 20 per cent amid growing consumer worries. India continues to export around 1 million barrels of refined fuel products despite several countries imposing export bans, and plans to continue exporting petroleum products under contractual commitments.