No oil supply shortage, Saudi Arabia assures India

New Delhi: Saudi Arabia, on Monday, assured India that there will be no shortage of oil supply in the wake of a drone hitting Aramco’s oil producing facility.

India, the world’s third-largest oil consumer, will not be hit by a reduction in production at its No 2 supplier (Saudi Arabia), the Saudi Oil Ministry said on Monday.

“Yesterday (September 15), Saudi Aramco officials informed the Indian refiners that there would be no shortage of supplies to them. India’s Ministry of Petroleum and Natural Gas is closely monitoring the situation in consultation with Indian refiners and Saudi Aramco,” it said in a statement.

The world’s leading crude production region.

A massive drone strike on the world’s largest crude-processing facility operated by Saudi Arabia’s behemoth Aramco has driven oil prices northward to their highest level in nearly four months. The attack has impacted over half of Saudi Arabia’s production as it cut 5.7 million barrels per day or more than 5 per cent of the world’s supply.

Yemen-based Islamist extremist group Houthi, supported by Iran, had owned up the drone strike on Aramco. Iran denied its hand in the attack and accused the West for fabricating a case to fish in the troubled waters of the Middle East.

Currently, India imports about 83 per cent of its oil needs. After Iraq, Saudi Arabia is its second-biggest supplier. It sold 40.33 million tonnes of crude oil to India in the financial year 2018-19, out of the country’s total imports of 207.3 million tonnes.

Oil prices shot up the most on Monday, with Brent crude rising by 19.5 per cent to $ 71.95 per barrel, which is the biggest gain in dollar terms since futures started trading in 1988.

Officials at state-owned oil Indian refiners said Saudi Aramco has informed New Delhi that there would be no major disruption, but has sought flexibility for switching to different grades for continuing supplies.

Crude supplies from Iran and Venezuela have already been curtailed significantly amid sanctions from the US.

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