Plan to skirt Strait of Hormuz will be template for future oil crises

India's new playbook of having its West Asian oil suppliers on board during the Israel-Iran conflict to bypass the Strait of Hormuz blockade will come into play during future emergencies, said Arvinder Singh Sahney, chairman, Indian Oil Corp. Ltd (IOCL), in an interview.

- Rituraj Baruah & Utpal Bhaskar

During the June conflict-led uncertainty in the global oil market, the national oil companies of Saudi Arabia and the UAE assured Indian state-run oil companies of uninterrupted supplies through all possible options, he added.

On 25 June, Mint reported the Centre was activating an emergency strategy to ensure uninterrupted oil supplies. This included a plan to bypass the critical Strait of Hormuz in Iranian waters through two pipelines—Abu Dhabi National Oil Co. (Adnoc)-operated Habshan-Fujairah strategic oil pipeline and Saudi Arabian Oil Co. (Saudi Aramco)-operated East-West crude oil pipeline—and tap into the global reserves and portfolios of Adnoc and Saudi Aramco.

India also explored options to increase supplies from other countries and regions, including Russia, Brazil, Latin America, Canada, and the U.S.

The new manual is significant to India, given that West Asian supplies comprise nearly 40% of its oil imports.

Sahney said during the 10-day Israel-Iran conflict, not a single cargo was delayed, deferred or cancelled. And, the way India and the oil marketing companies (OMCs) navigated the conflict, the IOCL was now confident of navigating any exigency to meet India's growing energy demand.

On shrinking discounts on Russian oil, he said it comes amid the decline in international oil prices.

Edited excerpts:

Given the recent conflict in West Asia, how well prepared is India and also Indian Oil?

Whatever happened reaffirmed our belief in ourselves as IOCL and India as a whole that we can manage the situation. If this had resulted in blockages on the strait, it could have had some impact, but at the same time, I will say that we were fully prepared for it.