Attacks in the Red Sea by the Houthis may hit India’s oil trade | Data

India's crude oil imports from Russia & petroleum product exports to Europe via Suez Canal at risk due to Houthi attacks in Red Sea.

Yemen’s Iran-backed Houthis have been targeting vessels in the Red Sea since November to show their support for the Palestinian Islamist group Hamas in its war against Israel. This has prompted major shipping companies to take the longer and costlier route around Africa’s Cape of Good Hope rather than through the Suez Canal. This is a cause for concern for India as it is a major importer of crude oil from Russia and a significant player in the export of petroleum products to Europe, both of which require transportation through the Suez Canal.

According to a recent Reuters report, at least four tankers transporting diesel and jet fuel from West Asia and India to Europe are taking the longer route around Africa to avoid the Red Sea. The diverted vessels were carrying a combined 2.4 million barrels of diesel and jet fuel.

India is increasingly becoming a significant player in the petroleum products export market. In May last year, data analytics firm Kpler reported that India became Europe’s largest supplier of refined fuels. In the ongoing and previous financial years, the Netherlands was the biggest importer of India’s refined fuels. In FY23 and FY24 (April-October), the country bought about $19,300 million worth of refined fuel from India.

These northbound oil shipments reach Europe via the Suez Canal. 

Chart 1A | The chart shows northbound crude oil and petroleum product volumes from origin countries transiting the Suez Canal and the SUMED pipeline (which transports crude oil north through Egypt). 1H23 - first half of 2023

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India was the third biggest player in terms of petroleum product volumes sent north in the first half of 2023.