New Delhi, March 12 (NationPress) Indian oil marketing companies (OMCs) are projected to manage average crude prices of up to approximately $90 per barrel in the medium term. This resilience is attributed, in part, to enhanced refining margins, even amid rising tensions in West Asia that stir worries regarding global energy supply chains, according to a report released on Thursday.

An assessment by CareEdge Ratings indicates that the geopolitical climate, particularly conflicts surrounding the Strait of Hormuz, has contributed to a significant increase in crude prices since late February, temporarily elevating benchmark Brent crude over the $100 per barrel threshold before stabilizing.

The strait serves as a vital chokepoint for worldwide energy transportation, responsible for about 20% of the global oil and LNG supply, with approximately 20.8 million barrels of oil and petroleum products transiting through this route daily.

For India, this disruption underscores a long-standing vulnerability in energy logistics, considering that around 40% of its crude oil imports navigate through the Strait of Hormuz, as noted in the report.

Nevertheless, the analysis suggests that these risks are somewhat mitigated by India's increasingly varied sourcing strategy.

While countries in West Asia still provide roughly half of India's petroleum crude and product imports, the nation has broadened its procurement from suppliers like the United States and Russia over the last five years.

Currently, India imports about 5.5–6 million barrels of crude oil daily, and analysts project that a $10 rise in crude prices could elevate the country's import costs by approximately $20 billion, according to CareEdge Ratings.

Beyond oil, the ongoing conflict could impact India through various external channels. Disruptions in shipping within the region may hinder trade, especially since exports to West Asia constituted around $64 billion, or nearly 15% of India's total exports, in FY25.

The report also notes potential indirect macroeconomic repercussions if global financial markets gravitate towards safe-haven investments such as the US dollar, which could exert pressure on emerging market currencies, including the Indian rupee.

Simultaneously, the report emphasizes, "Despite these external threats, India possesses adequate forex reserves to absorb shocks, although market fluctuations cannot be discounted."

In a more adverse scenario where crude prices persist above $100 per barrel for an extended duration, the report forecasts a modest impact on India's economic growth, yet the overall outlook remains bolstered by diversified energy sourcing and stable macroeconomic buffers.