With US President George Bush determined to disarm Iraq, India is quietly firming its contingency plans to tackle disruption in crude oil supplies that seems very likely once Baghdad comes under attack.New Delhi’s concern over the Bush resolve stems from the fact that the Gulf region provides 68 per cent of its oil supplies. Of the 78.64 million metric tonnes (MMT) of crude oil imported in the last financial year, oil imports from the Gulf were to the tune of 53.43 MMT.According to Petroleum Minister Ram Naik, oil companies have stocked over 40 days of petro-products and 15 days of crude oil supplies to meet any exigency. ‘‘We import only 1.4 MMT of crude from Iraq and in the event of war, only these supplies will be affected,’’ Naik says. But even he knows that Indian plans are not limited to stocking crude supplies. Ever since the US raised the pitch against Iraq last September, the energy security situation has been constantly monitored by the PMO with critical inputs from the Ministries of External Affairs, Petroleum and Finance. The Petroleum Ministry, gleaning from the Indian experience during Operation Desert Storm in 1990-91, has worked out two scenarios of oil supply disruption. The first scenario studies oil disruption in case military action is limited to Iraq. But the second plan factors the impact of military action spreading to Persian Gulf, causing disruption of West Asia exports. In the first scenario, crude oil supplies to India will not be significantly affected as India imported 1.466 MMT of Basrah light crude from Baghdad between September and December last year. But the Indian contingency plan in the second scenario is far more elaborate though there’s general acceptance that the global community will address the closure of Persian Gulf ‘‘very quickly’’ because countries like the US, Japan, France and Italy too are dependent on Gulf supplies. Taking no chances, the government has made its own plans:• Refineries to explore alternative crude oil imports, including spot purchases from regions outside the Gulf• Opening diplomatic channels with Egypt, Yemen, Nigeria, Russia, Malaysia, Norway, Angola, Venezuela, Oman and Australia for crude oil supply on term basis during crisis period• Indian PSUs and private firms to maximise crude and gas output, defer shutdown plans• May resort to imports and float 15 days of oil inventory (around two MMT) by hiring super tankers. Such a move will cost nearly Rs 2500 crore with Rs 25 crore per month as interest• With oil prices touching $ 32 per barrel, Petroleum Ministry will seek reduction of excise duties on petroleum products to partially absorb increase in international oil prices In the run up to Desert Storm, S Arabia and Iran had increased their oil production. And Iranian President Mohammed Khatami has now assured New Delhi that Teheran will increase its oil supplies to India. The other factor which helped India at that time was the shortfall being met by export blend crude from the erstwhile Soviet Union. While Indian vessels refused to enter the Gulf during 1991, New Delhi chartered foreign flag vessels which transferred the supplies to Indian vessels outside the war zone. It is learnt that Kuwait, which supplied 12 MMT of oil between 2001-2002, has now assured India of safe oil delivery by flying US flags on its oil tankers.
