Despite India's crude oil basket price climbing above $155 per barrel, domestic retail fuel prices have remained unchanged, according to energy industry executives cited in a report today. The Indian crude basket reached $156.29 per barrel on March 19, surpassing Brent crude prices in a rare occurrence, driven by supply disruptions in the Middle East. This surge occurred even after Iran previously stated it would permit Indian tankers carrying oil for the South Asian subcontinent to pass through the Strait of Hormuz. Due to the supply disruptions, the Indian crude basket has risen by approximately 120% cumulatively.

State-owned and private refiners are currently absorbing the cost pressures from this price spike, as reported by industry executives last Sunday. They also indicated that oil inventories are sufficient, with no immediate supply tightness expected. Meanwhile, the Indian Ministry of Petroleum issued a statement affirming that the government is actively taking steps to ensure preparedness and response capabilities in key sectors, given the evolving situation in West Asia. The statement added that all refineries are operating at high capacity with ample crude oil stocks, and the country maintains sufficient reserves of gasoline and diesel.

As the world's third-largest crude oil importer, after China and the United States, India relies on imports for over 80% of its oil needs. However, the report noted that India has a highly diversified supply base, sourcing from 40 oil-rich countries. Nevertheless, because the Indian crude basket is composed of high-sulfur crude from Oman and Dubai as well as low-sulfur Brent crude, the country remains vulnerable to international oil price fluctuations. At the close of last week, the Dubai/Oman benchmark contract had exceeded $160 per barrel.