Bloomberg agency said that refiners in India – the third largest importer of crude oil in the world – are seeking to enhance supplies from the Middle East and other neighboring countries, with increased risks following the recent attacks on ships in the Red Sea, in addition to prolonging shipping times and rising costs.
Shipping companies’ routes have shifted from entering the Red Sea in recent weeks. Because of the threat of the Yemeni Houthi group against ships linked to Israel, in support of the Gaza Strip, which has been subjected to continuous aggression for more than 81 days.
This resulted in large-scale operations being diverted to a longer route around the Cape of Good Hope, adding up to 3 weeks to the journey time. Among the affected ships are ships carrying goods from producers in the Mediterranean and North Sea, as they travel through the Suez Canal and the Red Sea on their way to Asia.
Bloomberg quoted people who requested anonymity due to the sensitivity of the issue, saying that shipping companies are asking Indian companies to bear risk premiums for deliveries through the usual route. They said that refiners are not willing to bear the additional responsibility and are looking for alternative suppliers.
anxiety
The main concern among Indian oil refiners is the potential pressure on margins due to higher insurance and shipping costs. Despite this, the necessity to meet the growing demand internally due to the country’s rapid economic growth remains paramount, according to Bloomberg.
A company official said that state-owned Bharat Petroleum Corporation had already arranged to obtain crude oil from other sources, but did not provide further details.
Bloomberg noted that although Indian refiners are concerned about supplies, there has been no impact on refinery operating rates so far.
Indian Prime Minister Narendra Modi discussed the situation in the Middle East, including the Red Sea attacks, with Saudi Crown Prince Mohammed bin Salman yesterday, Tuesday.
While oil prices maintained their largest gains in more than a week; Due to escalating tensions in the Middle East.
Brent crude, the global standard, was trading near $81 a barrel after rising 2.5% yesterday, Tuesday, while West Texas Intermediate crude was trading above $75.
