- Prices which are tied to international market may rise, sources said
- Attack at Aramco's oil facilities has halved Saudi production capacity
- Oil prices have shot up worldwide
There may be no disruption of supply of oil from Saudi Arabia despite last week's drone attack on two of its oil installations, but the prices which are tied to international market, may rise, sources told NDTV today. The attack at Aramco's oil facilities - allegedly carried out by Iran-linked Houthi rebels -- has halved Saudi Arabia's production capacity, and oil prices have shot up worldwide since.
Saudi Arabia -- the world's biggest oil exporter and the second-largest supplier of crude oil to India - will have to cut down on production for a month.
For now, India -- the world's third-largest oil consumer -- has commitment from Saudi Arabia's state-owned Aramco that there will be no disruption in supply. One oil tanker has left yesterday for India, the sources said. "We are waiting and watching the situation and will get a clear picture in two weeks' time on whether India gets affected or not".
The sources said at present, the government can deal with a price rise of upto 70 to 75 dollars per barrel. The current price is just above 67 dollars. "We have dealt with oil prices at 140 (dollars) too," the sources said.
Oil minister Dharmendra Pradhan has said New Delhi is hoping to raise oil imports from Russia and he has already met Igor Sechin, the chief executive of Russian oil major Rosneft, news agency Reuters reported. Four Indian companies have planned to increase their investment in Russia's oilfields, he added.
A year ago, the government had cut down on its sourcing of oil from the middleeast, going instead for a more diverse basket. From 60 per cent a year ago, it is now down to 56% in July. The rest is coming from Africa and the US.
India is now pitching for a stake in the vast oil and gas fields in the Russian Far East zone - an interest expressed during Prime Minister Narendra Modi's visit to Russia earlier this month. During the visit to Vladivostok for the Eastern Economic Forum, PM Modi said India will be contributing to the development of the zone with a 1 billion dollar Line of Credit.