No crisis, preparing to deal with all kinds of situation
New Delhi: With global oil prices hitting three-month high on heightened US-Iran tension, India is preparing to deal with all kinds of situations, Oil Minister Dharmendra Pradhan said on Wednesday, asserting that there was "no crisis" for the world's third-largest energy consumer.
Crude oil prices rose to a three-month high of almost USD 72 a barrel soon after Iranian air-strikes against US-Iraqi military bases, but cooled off amid speculation that Tehran is opting for limited retaliation over the killing of its top general. "There is no crisis," Pradhan told reporters here. "We are preparing to deal with all kinds of situations".
He did not elaborate.
India is 84 per cent dependant on imports to meet its oil needs and any spike in global prices has a direct bearing on its economy. Not just imports but even domestic crude oil –which forms the raw material for making petrol, diesel and other petroleum products – is priced according to international benchmarks.
The Middle East accounts for more than two-thirds of the country's oil imports, with Iraq and Saudi Arabia being the top suppliers. Pradhan said Foreign Minister S Jaishankar has spoken to his counterparts in major oil supplying nations and conveyed India's concerns over the geopolitical situation since last week.
"We are keeping an eye on the developments," he said.
Iranian strikes followed the killing of General Qassem Soleimani last week on US President Donald Trump's orders. Tensions have flared between the two nations since the US re-imposed sanctions on Iran last year over its nuclear programme.
Pradhan said there are different dimensions and ramifications of the developing situation in the Middle East.
"India is a major consumer (of oil) and we are keeping a close eye on the developments," he said. Brent crude oil rose as much as USD 3.48 to USD 71.75 a barrel before slipping to below USD 69. West Texas Intermediate climbed USD 2.95, or 4.7 per cent, to USD 65.65 on the New York Mercantile Exchange but later retreated to USD 62.84.
The Organization of Petroleum Exporting Countries (OPEC) promised to keep supplies flowing to customers.
While not a single drop of oil supply has been lost due to the escalation in tensions, United Arab Emirates Energy Minister Suhail Al Mazrouei said in Abu Dhabi that OPEC was "not forecasting a shortage of supply unless we have a catastrophic escalation, which we don't see".
In India, petrol and diesel prices were unchanged on Wednesday after six consecutive days of increases.
The retail pump prices of petrol in Delhi remained unchanged at Rs 75.74 per litre - the highest since November 2018 and diesel at Rs 68.79.
Since January 2, petrol price has increased by 58 paise per litre, while diesel rates have gone up 83 paise.
For an economy that is struggling to recover from a six-year low growth rate of 4.5 per cent, a spike in oil prices poses a significant risk as it will not just stoke inflation but also lead to higher outgo on
government subsidies on