New Delhi ,jun 23
Amid the ongoing conflict in the Middle East and rising crude oil prices, energy experts have said that oil supply through the Strait of Hormuz is unlikely to be immediately affected, though risks remain if tensions escalate further. Industry experts, in conversations with ANI, stated that the situation in the region remains tense after the recent US action against Iran, but the general hope is that oil supply routes will stay open.MK Surana, former chairman of Hindustan Petroleum Corporation Limited (HPCL), told ANI, “India has done well to diversify its supply sources in the last few years, and our dependency on Straits of Hormuz and supply from the Middle East is lesser now than what it was earlier. But any disruption in the Straits and Middle East supply will definitely affect crude oil prices globally. Therefore, for India, pricing is a bigger concern than the availability.”Surana added that immediately, there is unlikely to be any disruption in supply through the Strait of Hormuz. “Post US action on Sunday in Iran, the situation is of an uneasy calm awaiting Iranian response. General understanding and hope is that the supply chain through the Straits of Hormuz will not get blocked in reality and Iran will not precipitate actions that will damage any oil infrastructure in the neighbouring countries,” he said.However, “Despite a looming threat, till these two situations hold, the crude oil prices are unlikely to go above the USD 80 range, though there may be occasional spikes depending on news flow. But if any of the two situations happens in reality, the crude prices will rise sharply,” noted the ex-HPCL Chairman.Surana explained that fundamentally, based on supply-demand projections and without the current geopolitical tensions, crude oil prices would be in the range of USD 60 to 65 per barrel.Prominent energy expert Narendra Taneja echoed similar views. He told ANI, “The Strait of Hormuz has never ever been closed or blocked in history. It will be a major escalation if there is any attempt on the part of Iran to close the Strait. The US would most likely respond militarily and not let Iran block it. Major oil exporters Saudi Arabia, Kuwait, and Iraq would also protest.
