New Delhi, March 19: The petroleum ministry will be working in ‘close conjunction’ with the ministry of external affairs (MEA) as part of the new war-time strategy to manage oil imports.
Petroleum secretary B. K. Chaturvedi told The Telegraph that as part of this strategy, MEA has asked the Indian embassies abroad to keep a close track of the oil markets and be ready to help in making purchases from national oil companies of countries outside the war zone in case of an emergency.
Chaturvedi said that the country had adequate stocks of petroleum products to last it two months. Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) could produce an additional 20 days’ stock from their oil and gasfields during this period.
He said that the oil companies would use their experience in managing supplies during the earlier Gulf war to get through the current situation.
Last time the situation was considered more serious because both Iraq and Kuwait were involved in the war and the retreating Iraqis had set the oilfields ablaze in Kuwait. However, Saddam Hussein’s military might has been considerably eroded since the 1991 war and his potential for causing any major disruption in world oil supplies is, therefore, considered to be limited.
During the last war, prices had suddenly fallen from $ 30 per barrel to $ 20 barrel when it became clear during the course of the war that that the US was in complete command and Saddam could not cause any damage to the oilfields in Saudi Arabia.
Events seem to be following a similar course with the general expectation that the present war would be “short and contained”. This has already led to oil prices falling to a three-month low after Bush’s 48-hour ultimatum to Saddam.
Chaturvedi, however, said that the possibility of terrorist strikes by groups such as al Qaida have given rise to some concern this time around. He said that India’s policy would be to initially “wait and watch”. Fewer supplies would be picked up from the Gulf during the war in order to avoid risks.
He further stated that the recent purchase of a stake in the Sudan oilfield had added to the nation's oil security as it would make available another 3 million tonnes of our own oil this year.
Senior oil company officials are of the view that much of the recent increase in international oil prices in the wake of the war scare have been due to speculative activities. The Venezuela oil strike was another important factor but this has now been resolved.