The recent attacks on shipping vessels by Houthi militants in the Red Sea have, fortunately, not affected the supply of crude oil to India, according to Hindustan Petroleum Corporation Ltd (HPCL) chairman Pushp Kumar Joshi. Despite the ongoing incidents, the flow of crude oil to India remains unimpacted, but there has been a noticeable increase in freight costs due to rerouting via the Cape of Good Hope.
India, being the world's third-largest oil importer, heavily relies on Russian supplies through the Red Sea. In 2023, Russian supplies accounted for over 35% of India's total crude imports, reaching 1.7 million barrels per day. At present, Russian ships and cargoes are not primary targets of the attacks. However, the decision to reroute ships around the southern tip of Africa, bypassing the Suez Canal and Red Sea, has led to extended voyages. Consequently, this has caused a shortage of available ships and a subsequent rise in freight charges.
As the situation unfolds, it is crucial for stakeholders to monitor the impact on shipping routes and evaluate potential solutions to mitigate the challenges posed by the ongoing crisis in the Red Sea.
(With Agency Inputs)