Business
Strait of Hormuz blockade: India, China’s alternate oil supply cushion fades as Russian crude on water runs low – The Times of India
India and China, among the largest economies in Asia, may well be staring at a supply problem for their energy needs as the Middle East conflict drags on. Asia’s biggest crude importers have so far managed to soften the blow of more than seven weeks of conflict which has disrupted trade via the Strait of Hormuz by relying on alternative arrangements, helping cushion not only their own economies but also those of other regional buyers competing for supplies.That buffer, however, is starting to fade! To navigate an unusually severe energy disruption, China and India have explored multiple options, including direct arrangements with Iran and drawing on shipments of Russian and Iranian crude already at sea.
These floating reserves, though, are steadily reducing in numbers, according to a Bloomberg report. At the same time, movement through the Strait of Hormuz has effectively halted, with even vessels operating under sanctions for China’s independent refiners showing reluctance to challenge the US naval blockade.
India’s exposure greater than China
Among the two, India faces greater exposure. It depends heavily on the Gulf region not just for crude oil but also for liquefied petroleum gas used in households, where supply strains have been particularly evident. With limited reserves on hand, the world’s third-largest oil importer has increased purchases from Russia to bridge the gap, aided by US waivers. In fact, India’s purchase of Russian crude is now near the highs seen around June 2023.
Refining companies indicate they have sufficient supplies for the next month, but prices no longer reflect the discounted levels seen in the years following the Ukraine conflict. At the same time, the volume of crude available in transit is shrinking quickly.In mid-February, floating storage held around 20 million barrels of Russian oil available for purchase. That figure has since fallen sharply to under 5 million barrels, according to Anoop Singh of Oil Brokerage Ltd. Estimates from Vortexa Ltd suggest the volume is now closer to 3 million barrels, the Bloomberg report said.India had earlier ensured uninterrupted movement of LPG and other shipments through the Strait of Hormuz following a bilateral understanding with Iran. However, after a turbulent weekend in which two Indian vessels were targeted while attempting to pass through the route, New Delhi summoned Tehran’s envoy and has temporarily halted plans to dispatch empty ships to the Gulf for loading.The issue has been raised with Iran in strong terms, Randhir Jaiswal, spokesperson for the Ministry of External Affairs, said on Monday.The government may take measures to tighten exports, according to Anoop Singh of Oil Brokerage Ltd. Such steps have already been seen in China and other markets, even as India works to maintain refinery operations and meet domestic demand.
China better placed, but facing issues
China, however, is relatively better placed due to its long-standing focus on energy security, substantial reserves exceeding 1 billion barrels, and its position as the world’s largest consumer. Smaller economies risk being edged out by bigger buyers, although even Beijing is beginning to feel the strain of rising prices as supply tightens.According to the International Energy Agency, the absence of flows through the Strait of Hormuz led to a 10% drop in global supply last month. State-run refiners have already begun scaling back operations.With Iranian shipments no longer benefiting from exemptions tied to the Strait of Hormuz due to a blockade by the United States, pressure is also mounting on China’s independent refiners, often referred to as “teapots.” These players, which account for nearly one-fifth of China’s refining capacity, are now grappling with both tighter supplies and rising costs.Xavier Tang, a senior market analyst at Vortexa Ltd, said volumes of Iranian crude in transit are likely to decline as the US blockade disrupts a previously steady flow, even during the conflict, “although not at a fast pace.”According to Vortexa, Iran currently has around 160 million barrels of oil “on water,” referring to shipments already loaded and en route, only slightly below levels seen in February before the war began.While this volume remains relatively strong compared to historical trends, higher prices for Russian crude have also lifted Iranian grades. Discounts that once applied to barrels such as Russia’s ESPO or Iranian oil have turned into premiums, as buyers scramble for alternatives to Middle Eastern supplies.At the same time, risks have intensified with Washington stepping up secondary sanctions, adding further strain on independent refiners tasked with maintaining output.“All of Asia is looking at very constrained oil supplies,” Anoop Singh of Oil Brokerage Ltd said. “With every passing day the war is hurting more nations, sparing no one.”
The UK must not “cut ourselves off” from trade opportunities in China despite security and business risks, the head of the Confederation for British Industry has warned.
CBI chief Rain Newton-Smith highlighted that British businesses see increased trade with Chinese firms as an opportunity to drive growth.
Her remarks came as business leaders were questioned by MPs on Parliament’s Business and Trade Select Committee regarding the UK’s economic relationship with China.
Last December, Prime Minister Sir Keir Starmer admitted China poses security threats to the UK but urged for greater business ties.
Ms Newton-Smith, chief executive of one of the UK’s largest business groups, was positive about the Government’s engagement with China.
“You can’t have a growth strategy without a strategy for China,” she said.
“China has the biggest contribution to global growth, is the third largest trading partner, and the world’s largest consumer market.
“The UK is second largest exporter of trade and services.
“We are mindful as all businesses are of security risks but it is really important that we have a strategy towards China.
“This Government has increased the economic engagement with China and including business within this does help us as a country.”
She added: “If we think about the future economy, there is a huge market in China and I think we mustn’t cut ourselves off from some of the opportunities there, even if in some areas there are difficult conversations and negotiations that need to be had.”
Peter Burnett, chief executive of the China-Britain Business Council, told the committee: “There are risks associated with technology advancement, AI, industrial development that they need to assess.
“Increasingly you will find them saying that they need to engage more in China to understand those risks and to develop some of the technologies along some of those risks themselves.”
Business
Trump says he’d be disappointed if Fed pick doesn’t cut rates; Warsh vows to be ‘independent actor’ – The Times of India
US President Donald Trump on Tuesday said he would be disappointed if his nominee for Federal Reserve chair, Kevin Warsh, does not cut interest rates right away after taking office if confirmed by the Senate. Trump, during an interview with CNBC’s “Squawk Box,” also said “we have to find out” about the construction costs of the new Federal Reserve building.Warsh, a former Federal Reserve official and financier, is currently facing Senate confirmation hearings where he has stressed his independence from political pressure.“The president never once asked me to commit to any particular interest rate decision, and nor would I agree to it if he had,” Kevin Warsh said under questioning by the Senate Banking Committee, as quoted by LA Times. “I will be an independent actor if confirmed as chair of the Federal Reserve.”Warsh told lawmakers that fighting inflation would be one of his main priorities if confirmed.“Congress tasked the Fed with the mission to ensure price stability, without excuse or equivocation, argument or anguish,” Warsh said. “Inflation is a choice, and the Fed must take responsibility for it.”The comments come as investors closely watch his confirmation hearing, with inflation remaining at 3.3% annually and global tensions, including the war in Iran pushing up gas prices, adding pressure on the economy. Higher inflation typically leads the Federal Reserve to keep interest rates steady or raise them rather than cut them, as rate changes affect mortgages, auto loans, and business borrowing.Democrats on the Senate Banking Committee accused Warsh of shifting his stance on interest rates over time, supporting higher rates under Democratic presidents and lower rates during Trump’s presidency.Warsh, if confirmed, would take over at a time when inflation pressures make it difficult for the Federal Reserve to cut rates, even as Trump continues to push for lower borrowing costs. Trump has repeatedly urged rate cuts and has long clashed with current Fed chair Jerome Powell over monetary policy. Powell has also been the subject of a Department of Justice criminal probe after refusing Trump’s requests for faster rate cuts. Trump told CNBC that he does not plan to pressure the Justice Department to end that probe.
NEW DELHI: Nestle India reported a 26% increase in net profit to Rs 1114 crore on its highest ever domestic sales of Rs 6,445 crore for the fourth quarter ended March 31, 2026, led by premiumisation, penetration and higher ad spends.“This performance was powered by double-digit volume growth, driven by over 50% increase in advertising spends, whilst delivering a healthy EBITDA margin of 26%’’, Manish Tiwary, chairman and managing director, Nestlé India said.Total sales and domestic sales for the quarter increased by 23% each, while all product groups contributed to the performance, he said.For FY26, total sales increased by nearly 15% to Rs 23,071 crore, while the net profit jumped nearly 7% year-on-year to Rs 3545 crore. The company on Tuesday also declared a final dividend of Rs 5 per equity share.The West Asia conflict is likely to have a limited impact on most packaged food companies’ Q4 performance, as it was confined to March. However, companies have flagged higher input costs driven by the rise in crude oil prices.Elaborating on the commodities outlook, he said “Edible oil prices are firm and have moved higher in line with global crude oil prices, supported by increased diversion to biodiesel’’.Meanwhile, unseasonal rains have impacted wheat production, resulting in a delayed harvest and lower quantity and quality.Commenting on coffee prices, the company said it expects prices to continue to trend lower, supported by a favourable crop in Vietnam and the forthcoming crop in Brazil.
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