Around 10 per cent of Indian oil imports came from the Persian Gulf nation in the year through March, according to government data.
Brent oil has risen around 8 per cent from a low in mid-June as attacks on tankers near the Persian Gulf and Iran’s downing of a US drone pushed the two countries to the brink of war. India’s 39.1 million barrels of emergency crude reserves are only capable of meeting its needs for 9.5 days. By comparison, China is estimated to have stockpiles of about 550 million barrels, while the US has 645 million.
Prime Minister Modi is trying to address the problem, and is planning to add two new reserves with a combined capacity of 47.6 million barrels.
India’s navy deployed two ships to the Persian Gulf to provide security to Indian-flagged vessels last week, while the nation’s oil minister has reached out to Saudi Arabia and the OPEC+ coalition to ensure they work to maintain crude prices at reasonable levels.
Once the fastest-growing Asian economy, expansion slowed to 5.8 per cent in the three months through March from a year earlier, well below the 6.3 per cent forecast in a Bloomberg survey. Inflation has accelerated to 3.05 per cent in May from 1.97 per cent in January. India is also struggling with high unemployment and problems with its shadow banking system.