3 days ago
India Diversifies Crude Supplies as Iran War Drives Prices
India usually buys crude oil using two main price benchmarks.
About 70% is linked to Brent crude oil, while 30% is linked to the Dubai-Oman benchmark.
The conflict involving Iran disrupted some supplies reaching India.
Iran’s strikes on oil facilities in nearby countries, including Oman, added to the pressure.
India responded by looking for crude from other sources.
In September so far, the mix changed to 78% Brent and 22% Dubai-Oman.
The Indian crude basket cost $69 per barrel in February.
If the fighting continues, the price could rise above $100 per barrel.
India’s crude basket normally combines Brent crude oil and the Dubai-Oman benchmark in a roughly 70:30 split.
Supplies to India were affected as Iran’s strikes on oil facilities in neighboring countries, including Oman, intensified.
India looked elsewhere for crude, shifting the basket ratio to 78:22 in September so far.
The Indian crude basket cost $69 per barrel in February.
If hostilities continue, the Indian crude basket could rise above $100 per barrel.
- Who
- India, with crude supplies affected by hostilities involving Iran.
- What
- India diversified its crude sources and changed the composition of its crude basket as supplies were disrupted.
- Where
- The disruption involved oil facilities in neighboring countries such as Oman and affected supplies to India.
- When
- The basket ratio was reported as 78:22 in September so far; it cost $69 per barrel in February.
- Why
- Iranian strikes and continuing hostilities disrupted supplies, prompting India to seek crude elsewhere and increasing price pressures.
Key facts
- Normal crude-basket split
- Approximately 70% Brent crude oil and 30% Dubai-Oman benchmark.
- September crude-basket split
- 78% Brent crude oil and 22% Dubai-Oman benchmark so far.
- February basket price
- $69 per barrel.
- Potential price level
- The basket could exceed $100 per barrel if hostilities continue.
- Supply response
- India looked elsewhere for crude supplies.
- Conflict-related disruption
- Iran’s strikes on oil facilities in neighboring countries such as Oman affected supplies to India.
Sources
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