New Delhi: India is increasingly relying on the United Arab Emirates' (UAE) Fujairah and Khor Fakkan ports for energy imports as the ongoing conflict in West Asia raises risks along traditional shipping routes. With approximately 60% of India's crude oil imports and significant portions of liquefied natural gas (LNG) and cooking gas sourced from West Asia, Indian refiners are seeking safer alternatives to the Strait of Hormuz, which has become perilous due to rising tensions, according to sources familiar with the matter.
Alternative Routes
The UAE ports, located along the Gulf of Oman, are now critical for energy supplies, allowing Indian importers to bypass the Strait of Hormuz. The UAE's 406-kilometer Habshan-Fujairah strategic oil pipeline is also being utilized to facilitate this shift. Reports indicate that shipments from Oman’s Sohar port and Saudi Arabia’s Yanbu port are increasingly being used to navigate around the conflict, although the Red Sea route has proven to be more expensive due to its longer distance.
Ongoing Risks
Despite these alternative routes, the situation remains tense. Tehran has reportedly threatened to target these new shipping pathways, raising concerns for Indian importers. Before the conflict, the Strait of Hormuz was a major transit point for about 90% of India's crude oil needs. The current geopolitical climate is forcing a reevaluation of energy logistics for one of the world's largest energy consumers.
The shift to UAE ports could influence energy markets, particularly affecting crude oil and LNG prices as importers seek safer routes amid heightened risks. Investors will watch for developments in the conflict that could further impact shipping routes and energy supply chains.