New Delhi: India is making all efforts to bring back all homebound vessels stranded in the Strait of Hormuz “as early as possible” after a ceasefire between the United States and Iran opened the route for transit, said a senior government official on Wednesday. The statement came as earlier in the day, the United States (US) and Iran announced a two-week-long ceasefire, with Tehran agreeing to allow the safe transit of vessels through the Strait of Hormuz.
Follow Energy Watch on X
At an inter-ministerial press briefing on West Asia, Mukesh Mangal, Additional Secretary, Ministry of Ports, Shipping and Waterways, told the media, “We are in coordination with MEA (Ministry of External Affairs), our missions, as well as the owners of ships (stranded in Strait of Hormuz). We are trying our level best to bring our ships as early as possible as well as send vessels back again to bring the cargo from that region.” After discharge of supplies, cargoes are sent back to fetch more supplies. The transit of vessels back and forth between destinations indicate a normalcy in cargo movements.
The Ministry of External Affairs (MEA) welcomed the ceasefire, expressing hope for sustained de-escalation. “We welcome the ceasefire reached and hope that it will lead to a lasting peace in West Asia. As we have continuously advocated earlier, de-escalation, dialogue and diplomacy are essential to bring an early end to the ongoing conflict,” said the statement.
“The conflict has already caused immense suffering to people and disrupted global energy supply and trade networks. We expect that unimpeded freedom of navigation and global flow of commerce would prevail through the Strait of Hormuz,” said the MEA.
On being asked if the ceasefire means a return to normalcy for India, especially in terms of energy trade, Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas, remarked, “When will be the situation normal? I mean all of you know the situation that is before us. A lot of oil related infrastructure has been hit.” Government sources said that it will take time for India’s energy supplies to get normalised and reach pre-crisis levels.
“While crude and product flows may take months to normalise, some supplies would start for crude oil and petroleum products, like naphtha, LPG, thereby alleviating the immediate shortage… However, sustenance of ceasefire and resumption of traffic through Strait of Hormuz would remain key monitorables for oil and gas markets to normalise,” said Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA Limited.
“Apart from crude oil, natural gas supplies are urgently needed for sectors such as fertilisers, however supplies may take weeks to commence, apart from stranded cargoes. Nevertheless, prospects of supply commencing would ease pressure on prices of natural gas and fertiliser inputs which would reduce the fertiliser subsidy burden for GoI,” Vasisht added.
Follow Energy Watch on LinkedIN
India is largely dependent on imports to meet its crude oil and gas requirements. While India’s import dependency in crude oil is at 88 percent, for natural gas, it is at 50 percent, and 60 percent for Liquefied Petroleum Gas (LPG). With the possibility of supplies recommencing from Strait of Hormuz, crude oil, natural gas and LPG prices have eased, easing the pressure on the marketing margins of oil companies.