Does India have enough crude oil and LPG supplies amid West Asia conflict?

The Indian government does not plan to ration petrol and diesel, as sufficient stocks remain to meet requirements, ANI reported on Thursday, 5 March, citing people aware of the development.

It further noted that Gas Authority of India Limited (GAIL) will declare force majeure to secure gas supply for priority sectors, as India faces energy challenges arising from the escalating West Asia conflict.

The news portal reported that the decision follows Qatar Energy's declaration of force majeure on Wednesday. Force majeure is a contractual clause invoked when unforeseen circumstances hinder a party from fulfilling its obligations. It protects the party from penalties and potential breach of contract claims from clients.

Qatar supplies 20% of global LNG and is a vital partner for India, providing 60 million metric standard cubic metres per day (mmscmd) of gas out of the country's total 195 mmscmd imports.

According to the report, Australia and Canada have proposed selling gas to India amid the growing West Asia conflict, as the country seeks alternative energy sources. The government is exploring new markets for gas imports, currently sourcing 195 million metric standard cubic metres per day (mmscmd), with Qatar providing 60 million mmscmd.

Talks with major oil producers

India is in discussions with major oil producers and traders to purchase crude oil and LPG. The report said that the government is engaging with the International Energy Agency (IEA) and the Organisation of the Petroleum Exporting Countries (OPEC). India is also negotiating with the US to obtain insurance for ships.

The country recently entered into new agreements with the UAE and the US to broaden its energy sources.

The report said that India reviews the energy situation twice daily and remains in a very secure position. India's current stock levels are also considered comfortable, with stock being replenished daily.

No shortage

Additionally, there is no shortage of LPG or LNG as well as crude oil, in the world. The sources noted that India is in touch with other suppliers as well.

Amid West Asian turmoil, government sources on Tuesday told the news portal that India holds crude oil and petroleum product inventories for eight weeks, including strategic reserves. Additionally, only about 40% of India's crude oil imports pass through the Strait of Hormuz, thereby substantially reducing the risk of regional disruptions affecting supplies, it added.

The report mentions that India holds approximately 25 days of crude oil inventory. The country also maintains about 25 days of petrol and diesel stock. India continues to import Russian crude according to previous contracts.