News reports that say “Saudi Arabia is shutting down half of its oil production after drones attacked the world’s largest oil processing facility in the Kingdom” are worrisome for large oil consumers such as India, as they could lead to a spike in prices.
The Kingdom is one of the main suppliers of crude oil for Indian refiners and any such geopolitical development has immediate impact on prices. Not only does it affect the fiscal math of the buyers but the country as well.
Kabir Taneja, Associate Fellow, Observer Research Foundation, said: “Saturday’s attacks have reportedly affected 5 million barrels per day of oil production from Abqaiq. These attacks could push up oil prices significantly, causing stress to an already volatile economy in India.” Read more
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