Marine insurance: India asks US for cover on Middle East oil shipments amid Strait of Hormuz disruption

India has approached the United States for marine insurance cover for ships carrying Middle East oil. The move aims to keep energy supplies steady beyond India’s current stockpile, a senior oil ministry official said. The step follows disruptions to tanker routes linked to the war in West Asia. India is also working with producers and traders to secure extra cargoes.

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India currently holds crude oil stocks across tanks, pipelines, and vessels in transit. These volumes can meet 25 days of crude needs, the official said. India also has a similar number of days of finished fuel inventory. Finished fuels include petrol and diesel. The official said existing supply lines outside the affected sea lane still operate.

Strait of Hormuz disruption and India energy imports

The conflict in West Asia has affected tanker movement through the Strait of Hormuz. The channel carries about one-fifth of global oil volumes. It also handles large shipments of liquefied natural gas LNG. At its narrowest point, the strait is around 21 nautical miles wide. Shipping uses two 2-mile channels, split by a 2-mile buffer.

India imports about 88 per cent of crude oil and about half of its LNG. Around 40-50 per cent of crude cargoes pass through the Strait of Hormuz. For LNG, about 50-60 per cent of shipments use the same route. These shares raise risks when movement slows or stops. India has looked to alternate regions for replacement cargoes.

US marine cover and IDFC insurance plan for Strait of Hormuz

"We are in a comfortable position right now,\" the official said. The official added that non-Strait barrels continue to arrive. India is tapping West Africa, Latin America and the US for any shortfall. The official said talks are ongoing to secure oil, liquefied petroleum gas LPG, and liquefied natural gas LNG. Imports of oil and cooking gas LPG from the US have risen, the official said.

\"We are in touch with US authorities for getting a cover from the International Development Finance Corporation for vessels to transit the Strait of Hormuz,\" he said. US President Donald Trump has directed the institution to offer political risk insurance. It is also expected to provide financial guarantees for maritime trade in the area. The official linked the plan to safer movement for contracted cargoes.

However, the official said the cover needs funding before it can start. A corpus worth hundreds of millions of dollars must be created for IDFC to provide the protection. The premium will be paid by parties that contract the cargo, the official said. India continues to assess supply continuity in case the route stays constrained. Work is also under way to keep replenishment plans ready.

India LNG supplies cut after Strait of Hormuz closure

Even with adequate oil stocks, the official said LNG supply has been hit. The closure of the Strait of Hormuz has reduced LNG deliveries into India. This has led to gas supply cuts for industries. India consumes about 195 million standard cubic metres per day mmscmd of natural gas. Imports meet roughly half of this demand, the official said.

The shipping disruption and force majeure declared by QatarEnergy have worsened availability. The official said about 60 mmscmd of gas has become unavailable. The government may reprioritise gas allocation to protect critical sectors, the official said. Steps could include shifting fuel to essential services first. Officials are monitoring the situation for any further constraints.

India oil ministry talks with OPEC, IEA and global suppliers

The official said India is seeking crude from all sources, including Russia, to rebuild stocks. The government is in talks with Sonatrach and Abu Dhabi National Oil Company. It is also speaking with traders such as TotalEnergies, Vitol, and Trafigura. Oil Minister Hardeep Singh Puri has discussed market conditions with the IEA and OPEC, the official added.

With inputs from PTI