India weighs alternate crudes, refining costs, economic fallout as Iran conflict drags on in International Shipping News 06/03/2026 Indian refiners are maintaining their normal throughput levels but have started negotiating for incremental crude oil cargoes from the US, Russia, and West Africa to ensure that supplies remain plentiful in the event the Middle Eastern conflict drags on for a longer period, industry officials and analysts said March 5. While physical crude availability in the country might be sustained through alternative sourcing, analysts and refining sources said there were concerns that the cost structure would deteriorate sharply due to higher crude procurement prices, elevated freight and insurance costs, as well as longer shipping routes. “India faces elevated exposure to this disruption, with an estimated 50%-55% of its crude oil and LNG imports transiting the Strait of Hormuz. Strategic petroleum reserves cover only 8-9 days of oil demand, and there are no comparable strategic reserves for natural gas. If the disruption persists beyond the very short term, supply-side stress will intensify rapidly,” said Sumit Pokharna, vice president at Kotak Securities. India’s Strategic Petroleum Reserves currently have about 9.5 days of net oil imports. In addition, state-run oil companies hold storage facilities for crude oil and petroleum products equivalent to 64.5 days of total net imports, bringing the current total national storage capacity for crude and petroleum products to 74 days of total net imports, according to petroleum ministry data. Indian refineries processed 5.63 million b/d of crude in January, up slightly from 5.62 million b/d a year earlier, the oil ministry’s latest provisional update showed Feb. 24. The crude processed in January was 9.1% higher than the month’s target of 5.16 million b/d and was 0.2% higher than the processing level in December, the oil ministry said. Data for February has still not been released. “There is no need to cut throughput yet. Domestic crude stocks with refiners are sufficient for now. But refiners have started talking to alternative sources to bring in displaced volumes if there is a need,” Shrikant Madhav Vaidya, former chairman of state-run Indian Oil Corp., told Platts, part of S&P Global Energy. Product exports, Russian volumes Industry officials added that Indian refiners could limit oil product exports and divert some of the volumes to the local market if the Middle East conflict continues for a longer period. Around 52% of India’s roughly 5 million b/d of crude imports pass through the Strait of Hormuz, with Iraq, Saudi Arabia, the UAE, Kuwait, and Qatar as its key Middle Eastern suppliers, according to data from S&P Global Commodities at Sea(opens in a new tab). India’s exposure to Hormuz flows was lower at 41% in 2025 but has increased in recent months as Indian refiners have reduced their Russian crude purchases, averaging around 1.15 million b/d in the first two months of 2026, compared with 1.7 million b/d in 2025. Platts assessed Urals on a DAP West Coast India basis at a $11.40/b discount to Dated Brent on March 4. “It will not be surprising to see Russian volumes rising again temporarily. It will be easier for Indian refiners to bring in those cargoes for immediate replacement rather than bring them all the way from the US or West Africa,” an India-based refining source said. Indian sources said that refiners have sealed deals for a few Urals cargoes for prompt