{"id":"f-86c21c4f86-fe77bc9c-cc4d-5ecf-bd6a-230bf7a6db6f","title":"Cape of Good Hope, Russian crude: What alternatives does India have if Iran war chokes oil supplies?","description":"Oil prices spiked one per cent on Wednesday (March 4) as Iran’s war with Israel and the US intensifies. If the Strait of Hormuz remains closed for a prolonged period, India may have to seek alternatives to absorb the shock from the disruption to crude supplies from West Asia. Here are the options that New Delhi has","timestamp":1772623312,"category":"business","headline":"Cape of Good Hope, Russian crude: What alternatives does India have if Iran war chokes oil supplies?","modifiedHeadline":"If Iran War Hits Oil, Will India Turn to Russia?","subCategories":["scid_dad10ecd"],"subcategoriesName":["Energy"],"region":"IN","bundleMetaData":{"bundleId":"7b48871c-c993-4956-b43d-6f46f8e1b036","bundleTitle":"Today In India","cardData":null},"iabCategoryId":"389","fcSummary":"Cape of Good Hope, Russian crude: What alternatives does India have if Iran war chokes oil supplies?","summary":"Cape of Good Hope, Russian crude: What alternatives does India have if Iran war chokes oil supplies?","ctaUrl":"https://trends.glance.com/newz/news/IN/en/firstpost/f-86c21c4f86-fe77bc9c-cc4d-5ecf-bd6a-230bf7a6db6f","sourceUrl":"https://www.firstpost.com/explainers/iran-war-cape-of-good-hope-russian-crude-india-alternatives-oil-supplies-strait-of-hormuz-13986087.html","bannerImage":"https://g-mob.glance-cdn.com/public/fc/image/XZlqf__bG5J0.webp","content":"The war in West Asia has put the global oil market at risk. Oil prices surged one per cent on Wednesday (March 4) as the US-Israeli war on Iran disrupted supplies in the region.\n\n
\n
\n With Tehran shutting down the Strait of Hormuz, through which about a fifth of the world's oil and liquefied natural gas (LNG) flows, shipping companies have started rerouting vessels around Africa. India, the world’s third-largest consumer of crude oil, could also explore alternative options if the narrow Gulf chokepoint remains disrupted.\n
\n
\n The Cape of Good Hope has come to the spotlight as Iran’s Revolutionary Guard Corps (IRGC) declared the Strait of Hormuz “closed” and warned that any vessel attempting to pass through the waterway would be set “ablaze.”\n\n
\n
\n What is the Cape of Good Hope? Will India end up tapping into alternative options to maintain oil supplies?\n
\n
\n We take a look.\n
\n

Cape of Good Hope

\n
\n The Cape of Good Hope is a rocky headland on the Atlantic coast of South Africa. It was originally named the Cape of Storms in the 1480s by the Portuguese explorer Bartolomeu Dias.\n
\n
\n Later, it was renamed the Cape of Good Hope by King John II of Portugal, as it opened a sea route to India and Asia.\n
\n
\n However, the opening of the Suez Canal in 1869 offered the world’s biggest ships or those carrying valuable cargo safer, shorter, and less costly routes. It provided a shorter route from the Mediterranean Sea to the Indian Ocean, rendering the long trip around Africa ineffective.\n\n
\n
\n Whenever the Suez Canal is blocked, shipping companies seek alternative routes and opt for the Cape of Good Hope. But it is a long, costly route.\n
\n
\n As per Indian Express, the Cape of Good Hope route adds 15-20 days to the voyage to Europe from India, along with significantly raising the freight costs.\n
\n

Does India have enough oil stocks?

\n
\n For now, India has enough barrels to absorb the shock from disruptions to West Asian oil supplies.\n
\n
\n A government source told The Hindu on Tuesday (March 3) that India has adequate stocks of crude oil and energy products (petrol and diesel) for the next 25 days each.\n\n
\n
\n “We are in a reasonably comfortable position as far as crude oil is concerned. We have crude oil in reserve for 25 days, alongside energy products for 25 days as well,” the source said.\n
\n
\n This does not include the emergency-earmarked Special Petroleum Reserves (SPR), which would take the country’s crude oil buffer well beyond 25 days.\n
\n
\n According to vessel tracking service Kpler, India has about 100 million (10 crore) barrels of commercial crude oil stocks — in storage tanks, underground strategic reserves and on ships heading towards the country.\n\n
\n
\n These supplies are expected to cover about 40-45 days of its requirement if the blockade of the Strait of Hormuz persists.\n
\n
\n \"The country maintains strategic petroleum reserves alongside commercial inventories held by refiners and oil marketing companies. These buffers are intended to manage temporary supply shocks rather than sustained outages,\" Sumit Ritolia, Lead Research Analyst, Refining and Modeling at Kpler, told PTI. \"Based on Kpler inventory data, commercial crude stocks are around 100 million barrels, including volumes in the strategic petroleum reserve facilities at Mangalore, Padur and Visakhapatnam.\"\n\n
\n
\n He said the immediate impact of a complete halt on crude supply from West Asia, albeit temporarily, would be logistical and price-driven. However, Ritolia added that supply risks will increase if there is a prolonged disruption through the Strait of Hormuz.\n
\n
\n India imports around 2 billion barrels of oil annually, which makes up 88 per cent of its total needs. Kepler data shows that about 50 per cent of India’s crude imports, or 2.5-2.7 million barrels per day, transit the Strait of Hormuz, largely sourced from Iraq, Saudi Arabia, the United Arab Emirates (UAE) and Kuwait.\n\n
\n
\n This is roughly half the six million (60 lakh) bpd the country consumes every day, as per end-2024 figures, according to NDTV. \n
\n
\n Oil prices are likely to see an immediate impact as the West Asian supplies get disrupted. Brent, the global benchmark for crude oil, jumped $1.17, or 1.4 per cent, to $82.57 a barrel by 0408 GMT (9:38 am IST) on Wednesday, reported Reuters.\n
\n
\n
\n
\n India spent $137 billion on crude oil imports in the fiscal year ending March 31, 2025. During April 2025 to January 2026, India’s import bill was $100.4 billion for 206.3 million tonnes of crude oil.\n\n
\n
\n If shipping companies were forced to take longer routes amid the closure of the Strait of Hormuz, the crude import bill would further rise.\n
\n
\n Higher freight, war-risk insurance and geopolitical premiums could also add up to landed costs.\n
\n

Will India resort to alternative options?

\n
\n The Strait of Hormuz has come to a near halt as Iran targets oil tankers in the region.\n
\n At least five tankers have reportedly been damaged, two personnel killed and about 150 ships stranded around the strait.\n
\n
\n “Traffic is down at least 80 per cent,” Michelle Bockmann, a senior maritime intelligence analyst at Windward, told \nAl Jazeera, adding that the shipping industry was already facing a “huge spike” in freight costs for routes out of West Asia and the Gulf.\n
\n
\n

\n $\"strait$ \n

Tankers are seen off the coast of the Fujairah, as Iran vows to close the Strait of Hormuz, amid the US-Israel conflict with Iran, in Fujairah, United Arab Emirates, March 3, 2026. Reuters

\n \n

\n
\n
\n India could look for other options to meet its crude requirements in case of the sustained closure of the narrow waterway.\n
\n
\n As per Moneycontrol, taking the Cape of Good Hope route would mean buying more oil from suppliers outside the Gulf, such as the US, Brazil, Guyana or West Africa. These shipments would then pass through Africa’s southern point.\n
\n
\n But this route could extend voyages by roughly 6,000 to 10,000 additional nautical miles.\n\n
\n
\n Large crude tankers usually sail at about 12-15 knots, meaning they remain at sea for roughly two to four extra weeks. If shipments come via the Cape of Good Hope route, refiners could have to wait for cargoes for nearly a month longer instead of just days if they took the Gulf route, as per the Moneycontrol report.\n
\n
\n The additional freight bill per cargo could run into hundreds of thousands to over a million dollars if the tanker is at sea for 15-25 extra days.\n
\n
\n In such a case, India could also tap into Russian oil to make up for the shortfall from West Asia. But this is likely to invite the ire of the US, which reached an interim trade deal with India on the condition it reduces its reliance on Russian crude.\n\n
\n
\n India may purchase Russian crude to ward off any large-scale energy supply volatility due to the Iran war, government sources told NDTV Profit.\n
\n
\n They said a series of 'emergency' measures have been proposed, including curbs on petrol and diesel exports and LPG rationing.\n
\n
\n As per Reuters, Indian companies had already slashed natural gas supplies to industries in anticipation of restrictions after top producer Qatar halted LNG production.\n
\n
\n Global shipping companies Maersk, Hapag-Lloyd and CMA CGM have already started rerouting vessels around Africa, avoiding the Suez Canal and the Bab el-Mandeb Strait.\n\n
\n
\n \"Due to the deteriorating security situation in the Middle East [West Asia] region following the escalating military conflict, we have decided...to pause future Trans-Suez sailings through the Bab el-Mandeb Strait for the time being,\" Danish container shipping group Maersk said in a statement on Sunday.\n
\n
\n German shipping group Hapag-Lloyd said in a separate statement it was rerouting its IMX container shipping service that connects India and West Asia with the Mediterranean around southern Africa, reported \nReuters. \n
\n
\n It said it would prioritise the strait route again once the security situation permitted transit.\n
\n
\n Maersk and Hapag-Lloyd said they were suspending all vessel crossings in the Strait of Hormuz until further notice.\n
\n
With inputs from agencies","readDurationInMinutes":"15","author":{"name":"Firstpost","logo":"https://glance-mob.glance-cdn.com/public/bubble/png/28d65284-7c7e-4e74-a1da-84b4daef1e4c.jpeg"},"ism":false,"analyticsResponses":[{"measurementId":"DUMMy","type":"GA"}],"tags":["IndiaOilSupply","StraitOfHormuz","IranIsraelConflict","OilPrices","CapeOfGoodHope","EnergySecurity","CrudeOil","WestAsia","SuezCanal","RussianOil","Geopolitics","ShippingRoutes","StrategicPetroleumReserves","GlobalOilMarket","NewDelhi","SupplyChainDisruption","USIndiaRelations","Maersk","HapagLloyd","CMA","CGM"],"redirectionEnabled":false,"consent":true}

Cape of Good Hope, Russian crude: What alternatives does India have if Iran war chokes oil supplies?

SUMMARY