The absence of alternatives to the Strait of Hormuz puts pressure on the largest oil importers in Asia
Facing the largest Asian importing countries Oilis under increasing pressure, with the absence of alternatives to the Strait of Hormuz, which it has resorted to to limit the repercussions of The warthat has been ongoing for more than seven weeks in the Middle East, which previously helped protect their economies and the economies of neighboring countries competing for energy shipments.
An economic report said: This ability to maneuver has begun to fade.
Shortage of oil supplies
Both China and India have resorted to a set of solutions, to deal with the shortage of oil supplies, which included bilateral agreements with Tehran, in addition to relying on shipments of Russian and Iranian oil that were already at sea. However, these floating supplies began to gradually decline, at a time when shipping traffic through The Strait of Hormuz, with even sanctioned ships reluctant to test the US blockade.
The most vulnerable is India, which relies heavily on Gulf supplies, not only of crude oil, but also of liquefied petroleum gas used in cooking, which is in severe shortage. With limited reserves, New Delhi increased its imports of Russian oil to fill the gap, taking advantage of US exemptions.
According to the report, although the refineries confirmed that they were insured with supplies for the next month, prices are no longer at the discount levels that have prevailed since the outbreak of the war in Ukraine, and the quantities of oil available at sea are declining at a rapid pace.
In mid-February, the quantities of floating stored Russian oil available for sale reached about 20 million barrels, but they decreased. Currently to less than 5 million barrels, according to company data "Oil Brokerage"As estimates indicate "Vortex" To only about 3 million barrels.
India was previously able to secure the passage of liquefied petroleum gas shipments through the Strait of Hormuz after a bilateral agreement with Iran, but two ships were attacked over the weekend, prompting the government to summon the Iranian ambassador and postpone plans to send new tankers to the Gulf.
A spokesman for the Indian Ministry of Foreign Affairs confirmed that the government has dealt with these developments. "Very strictly".
At the same time, Iranian oil has effectively exited the Indian market’s accounts, after a temporary US exemption expired over the weekend.
Consequently, consumers in India are preparing for the first broad increase in diesel prices in four years, amid expectations that increases will be approved by government refineries, which may enhance inflationary pressures and negatively affect economic growth, especially with the weakness of the currency.
Expectations indicate the possibility of imposing additional restrictions on exports, at a time when countries such as China have begun to take Similar steps, while India faces difficulties in maintaining operating rates and meeting domestic demand.
On the other hand, China appears to be in a relatively better position, thanks to years of focus on energy security, and its possession of reserves exceeding one billion barrels, in addition to its strength as the largest global consumer. However, smaller economies remain more vulnerable to pressure, while Beijing itself is beginning to feel the impact of rising prices as supplies shrink.
According to the International Energy Agency, the disruption to oil flows through the Strait of Hormuz has led to a decline in global supplies by about 10% over the past month.
China’s state refiners have already begun reducing operating rates, while independent refineries (known as"Pitchers") has come under increasing pressure as a result of rising prices and declining supplies, especially with the tightening of secondary US sanctions.
Analysts expected a gradual decline in Iranian oil flows, despite the continued presence of about 160 million barrels in the sea, levels that remain historically high, but are gradually eroding, according to Bloomberg.
The increase in Russian oil prices led to an increase in Iranian oil prices, while previous discounts turned into price bonuses, as buyers sought to find quick alternatives to Middle Eastern supplies.
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In light of these developments, risks are increasing with Washington tightening sanctions, which puts more pressure on Asian markets.
An analyst at "Oil Brokerage": "Oil supplies in Asia are severely restricted, and with every day the war continues, the sphere of influence expands to include more countries without exception".
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