India is widening its crude oil sourcing to Latin America as disruptions linked to the Iran conflict and the Strait of Hormuz push refiners to diversify supplies, according to ship-tracking data and industry analysis cited by PTI.Indian crude imports from Venezuela have risen sharply in August, making it the country's fourth-largest supplier, Kpler data showed. Venezuelan supplies reached about 444,000 barrels per day (bpd), ahead of Iraq at 118,000 bpd and the US at 153,000 bpd.The shift marks a broader effort by Indian refiners to reduce their dependence on any single supply route while keeping crude availability stable.Russia remains India's largest crude supplier, with imports nearing 2 million bpd in August. Russian shipments had reached around 2.6 million bpd in June-July, accounting for more than half of India's crude intake.India has also increased purchases from Venezuela, Brazil and African producers as Middle Eastern supplies faced disruptions, while continuing to rely heavily on Russian crude. India's strategy is increasingly operating on several fronts at once: increasing domestic upstream production where possible, diversifying overseas crude suppliers and transportation routes, building strategic and commercial inventories, and accelerating alternatives such as gas, biofuels, EVs and renewables, Sumit Ritolia, senior manager - modelling at Kpler, said.Latin American crude gains groundIndia's purchases from Venezuela have increased rapidly since imports resumed in April.Between April and July, crude from Latin America accounted for 12.7% of India's imports, up from 3.5% a year earlier. Over the same period, the share of Middle Eastern crude fell to about 30% from 43%.Russian crude, meanwhile, accounted for more than half of India's imports in July.India's overall crude imports have remained around 5 million bpd in recent months, helping refineries maintain operations despite disruptions.However, replacing Middle Eastern crude completely is neither practical nor necessarily economical, Ritolia said.Gulf producers have a geographical advantage because they are closer to India, resulting in shorter voyages and lower transportation costs than supplies from Venezuela, the US, West Africa and other parts of Latin America.Longer shipping routes can also increase freight and insurance costs. Diversification helps with supply security, but it can only go so far in insulating India from geopolitics. India will still need to import large volumes of crude, meaning any major disruption will ultimately feed through into higher oil prices, freight and import costs, PTI quoted Ritolia as saying.India cannot quit oil overnightCrude oil remains central to India's energy system as vehicle ownership, aviation, industrial activity and petrochemical consumption continue to grow.Crude is refined into products such as petrol and diesel, making it difficult for India to sharply reduce oil consumption in the near term.Even faster electric vehicle adoption will take time to change the composition of India's existing vehicle fleet. Other alternatives such as natural gas, biofuels and renewable energy are also not yet large enough to replace oil demand at scale.This has made domestic production another part of India's energy-security strategy. While domestic production alone has limited potential to materially reduce import dependence, every incremental barrel produced domestically offers some insulation from geopolitical disruptions, international price volatility and higher freight costs, Ritolia said.India is therefore pushing to increase domestic oil and gas production, encourage exploration and bring new discoveries into production.Energy security goes beyond crudeThe country's exposure to Middle Eastern supplies is even more significant in LPG, while LNG also remains vulnerable because alternative supplies and logistical flexibility are more limited.This means India's energy-security strategy will need to cover gas supplies, storage capacity and strategic reserves in addition to crude.The disruptions could also bring greater scrutiny to India's strategic petroleum reserves as the country weighs whether existing stocks provide enough protection against prolonged supply disruptions.For now, the focus is less on reducing oil imports immediately and more on making those imports harder to disrupt. Overall, I would see the current push as a multi-pronged energy-security strategy rather than simply a move away from oil: produce more oil and gas domestically, diversify the crude that still needs to be imported, strengthen supply, invest heavily in creating strategic inventory buffers-SPR for both crude and gas and progressively increase the role of EVs, gas, biofuels and renewables, Ritolia said. Given India's economic and demand growth, oil is likely to remain an important part of the energy mix for a long time, even as its share gradually changes. (With inputs from PTI)
