West Asia crisis: Strong response, but challenges persist ahead in petrochem space

AS THE WEST ASIA crisis enters its third month and the Strait of Hormuz — through which 20% of the world’s oil and LNG passes — remains shut, triggering an unprecedented hike in oil prices across the globe, India is one of the rare Asian countries that has braved the crisis well. However, elevated oil and gas prices, raw material supply chain issues, and high logistics costs since the beginning of the war are continuing to put strain on the petrochemical sector.

The government says all refineries are operating at high capacity with adequate crude inventories and sufficient stocks of petrol and diesel. India’s crude oil imports fell 13% to 4.5 million barrels per day (bpd) in March from pre-war levels. The Middle East cargo shortage was offset by imports from Russia, which doubled to 2.25 million bpd in March.