The East‑West pipeline, a vital artery for 400,000 barrels of oil per day to India, was shut by Saudi Arabia last week after drone attacks tore through a section of the line. Bloomberg reports the kingdom is working to bypass the damaged stretch, but the closure has already stalled the flow of Russian crude that India has been buying at a discounted rate.
On Wednesday, the U.S. Congress passed a sweeping sanctions bill that clears the way for punitive tariffs against any country that trades with Russia’s oil sector. The bill’s language, experts say, could raise the price of Russian crude by up to 20 percent, pushing Indian refiners toward more expensive suppliers.
India’s state‑owned refiners have secured September and October supply contracts, but November and beyond remain uncertain. With inventories falling to 93.5 million barrels in the week ending Sept. 14 – the lowest since May – the country has only enough crude to cover roughly 20 days of imports, a precarious buffer as new demand climbs.
In response, the industry is leaning on alternative markets. Refiners are already turning to the U.S., Brazil, Canada, Venezuela and several African producers, but the higher purchase price is tightening margins for plants that already sell gasoline, diesel and cooking gas below cost.
As the new 180,000‑barrel‑per‑day refinery in Rajasthan ramps up and Indian Oil Corp. expands capacity by 340,000 barrels per day by December, officials say a decision on November orders will be made by the end of next week, balancing the trade‑offs between higher procurement costs and the risk of running out of crude.