The attacks on ships in the Red Sea by Houthi militants have not affected crude oil flow to India, although freight has gone up because of rerouting via the Cape of Good Hope. The third largest oil importer in the world, India imports a significant proportion of its Russian supplies via the Red Sea. In 2023, Russian supplies covered over 35 percent of total crude imports to India, with a value of more than $1.7 million barrels per day.
At the moment, Russian ships and goods are not prime targets of these attacks; however, re-routing around the African southern tip instead of transiting from the Suez Canal to the Red Sea meant longer voyages, making a lack of ships and increased freight rates.
Speaking to investors during its post-third quarter earnings call, Joshi said HPCL has secured crude oil supplies until mid-April and does not see supply disruptions.
HPCL covers about 44-5 percent of its crude oil requirements on term contracts with international national companies, mostly from Saudi Arabia and Iraq. The rest is either on the spot or from the local market, he added.
“The term crude has not been affected (Red Sea crisis),” he said,
citing that spot imports were on a DES basis where the supplier arranges the shipment. The Red Sea shipping lane contributes 50 percent of exports and 30 percent of imports in the last fiscal.
The European, North American, and northern parts of Africa trade with domestic companies through Red Sea routes bypassing the Suez Canal.
In the last fiscal year, these regions contributed 50 percent of national exports valued at Rs.18 lakh crore and imposed imports worth Rs.17 lakh crore.
The entire merchandise trade of the nation was Rs 94 lakh crore in the last fiscal, where nearly two-thirds of value and around four-fifths of volume have been carried by sea route; this has been revealed from a recent report released by Crisil Ratings.
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