Russian energy giant Rosneft has decided that its India bound shipments will avoid the Strait of Hormuz — a global artery for transiting oil and gas — which is in the cross-hairs of military tensions between the United States and Iran.
The decision is in tune with India’s call on diversifying energy sources, and lowering reliance on the Persian Gulf, where geopolitical rifts are rife.
IOC signs contract
On Wednesday, Indian Oil Corporation Limited (IOCL) signed the first ever supply contract of two million metric tonnes of crude oil with Russia’s Rosneft. “Sourcing of Russian crude oil through long term contracts is a part of India’s strategy for diversifying the country’s crude oil supplies from non-OPEC countries…” said a statement issued by the Press Information Bureau (PIB).
It pointed out that that the contracted oil “will be loaded in Suezmax vessels at Novorossiysk port of Russia and will come to India, bypassing Straits of Hormuz.” Suezmax ships are medium to large sized vessels of 1,20,000 to 2,00,000, tonnes, which can transit through the Suez Canal when carrying a full load.
Nearly one third of world’s production of liquefied natural gas and 25% oil transits through the Strait of Hormuz — a passage between the Persian Gulf and the Gulf of Oman.
Analysts point out that the drone attack, claimed by Yemeni Houthi fighters last September on two giant refineries in Saudi Arabia was a turning point, which imparted urgency to diversify imports to beef up energy security.