The crude oil tanker RN Polaris and a bulk service sail in Nakhodka Bay close to the port metropolis of Nakhodka, Russia,
| Photo Credit: Reuters
Yemen’s Iran-backed Houthis have been focusing on vessels in the Red Sea since November to point out their help for the Palestinian Islamist group Hamas in its struggle towards Israel. This has prompted main delivery firms to take the longer and costlier route round Africa’s Cape of Good Hope reasonably than by way of the Suez Canal. This is a trigger for concern for India as it’s a main importer of crude oil from Russia and a major participant in the export of petroleum merchandise to Europe, each of which require transportation by way of the Suez Canal.
Also learn:Houthi attacks: a menace to world delivery?
According to a current Reuters report, at the least 4 tankers transporting diesel and jet gasoline from West Asia and India to Europe are taking the longer route round Africa to keep away from the Red Sea. The diverted vessels had been carrying a mixed 2.4 million barrels of diesel and jet gasoline.
India is more and more changing into a major participant in the petroleum merchandise export market. In May final 12 months, knowledge analytics agency Kpler reported that India turned Europe’s largest provider of refined fuels. In the ongoing and former monetary years, the Netherlands was the largest importer of India’s refined fuels. In FY23 and FY24 (April-October), the nation purchased about $19,300 million value of refined gasoline from India.
These northbound oil shipments attain Europe by way of the Suez Canal.
Chart 1A | The chart reveals northbound crude oil and petroleum product volumes from origin nations transiting the Suez Canal and the SUMED pipeline (which transports crude oil north by way of Egypt). 1H23 – first half of 2023
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India was the third largest participant in phrases of petroleum product volumes despatched north in the first half of 2023.
Chart 1B | The chart reveals the vacation spot nations of the northbound crude oil and petroleum product volumes transiting the Suez Canal. 1H23 – first half of 2023
In the first half of 2023, the Netherlands was the single largest importer of such merchandise, most of which got here from India.
These two charts present the important affect that the attacks on business ships in the Red Sea can have on India’s petroleum product exports. Both present million barrels per day of oil shipments.
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An even larger fear for India is the report quantity of crude oil it imports from Russia. In FY24 (April-October), India imported over $26,900 million value of crude oil from Russia — its largest supply of oil this 12 months — with Iraq that includes a distant second ($15,582 million). A majority of this crude oil is arriving by way of the Suez Canal southbound to India.
Chart 2A | The chart reveals southbound crude oil and petroleum product volumes from origin nations transiting the Suez Canal, in million barrels per day. 1H23 – first half of 2023
In FY23 and FY24 (April-October), southbound provide of crude oil from Russia by way of the Suez Canal grew exponentially.
Chart 2B | The chart reveals the vacation spot nations of the southbound crude oil and petroleum product volumes transiting the Suez Canal. 1H23 – first half of 2023
Most of the southbound crude from Russia went to India adopted by China in FY23 and FY24 (April-October). These two charts present the potential affect that the escalating tensions in the Red Sea can have on India’s crude oil imports from Russia and different nations which use this route.
Reports present that refiners in India wish to enhance provide from West Asia as in any other case, the value of imports may rise given the danger concerned in transporting oil by way of the Suez Canal. With retail gasoline prices already at a historic excessive in India, and the normal elections approaching, it stays to be seen how this case will unfold.
With inputs from Reuters, AP and the U.S. Energy Information Administration
Source: The charts had been sourced from an article titled ‘Red Sea chokepoints are critical for international oil and gas flows’ printed by the U.S. Energy Information Administration
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