India Emphasizes That Shipping Chaos, Not Supply, Is Driving High Oil Prices

India’s oil minister, Hardeep Singh Puri, told reporters that the current run-up in oil prices is being driven primarily by disruptions to shipping and trade routes rather than an absolute shortage of crude. Puri said worldwide crude production sits near 104 million barrels per day while consumption is about 94 million bpd, indicating spare supply on a headline basis. However, he argued much of that available oil cannot easily reach customers because of disruptions linked to the Middle East and the Strait of Hormuz. Puri traced the logistics challenges back to a sequence of geopolitical shocks, starting with the Russia-Ukraine conflict and more recently intensified by disruptions affecting the Strait of Hormuz. Those events, he said, have choked supply routes and pushed up freight rates, insurance premiums and other transport-related costs — factors that, in turn, lift delivered oil prices. The minister highlighted the practical impact on India, which imports roughly 85% of its crude oil. Since fighting in the region has constrained Middle Eastern flows and increased benchmark crude and shipping costs, India’s crude import bill has risen substantially. Puri noted that higher freight and insurance charges on voyages through or around the Hormuz corridor have reached unprecedented levels. As a result of these supply-route vulnerabilities, India plans to bolster domestic oil and gas exploration to reduce reliance on imported crude and strengthen energy security. The comments were reported by Indian media and summarized by Oilprice.com.