No need for panic, enough oil available in the world: Oil Minister Hardeep Singh Puri on impact of war on oil

India will be able to navigate through any oil supply shock that may result from the potential widening of the conflict in the Middle East, Oil Minister Hardeep Singh Puri said on Tuesday.

International oil prices have flared to near USD 79 per barrel from about USD 70 per barrel in just over a week's time, as the market waited to see if Israel would retaliate against Iran for the October 1 missile attack.

"There is no cause for panic," Puri said. "More than enough oil is available in the world."

While India, the world's third largest oil importing and consuming nation, is more than 85% dependent on imports to meet its crude oil needs, the situation is "manageable", he said. "There is no need for concern."

"We are pretty confident we will be able to navigate as we had done in the past," he said.

This is primarily because the market is awash with oil supplies and if some parties hold back production or there are supply issues, there are new suppliers in the market to fill in the void.

"More than enough oil is coming into the market," he said at the FT's Energy Transition Summit India.

After the Iranian missile attack, it is being speculated that Israel may target oil or nuclear facilities in Iran. And Tehran can choose to respond with either a direct attack on Israel or shutting the Strait of Hormuz - the world's most important oil transit point, further flaring oil prices.

The Strait of Hormuz, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. A fifth of global oil flows through the Strait. Oil from all major oil producers -- Saudi Arabia, Iraq, Kuwait and UAE -- is exported via the Strait.

Only Saudi Arabia and the United Arab Emirates (UAE) have operating pipelines that can circumvent the Strait of Hormuz.

Prior to the spike last week, the most since January 2023, there were hopes of a cut in petrol and diesel prices. The price of a basket of crude oil India imports had averaged USD 73.69 per barrel in September, down from about USD 83-84 a barrel in March when petrol and diesel prices were last cut by ₹2 per litre.

But the surge has now almost dashed such hopes.