Oil prices may spike on Aramco drone strikes, affecting Delhi’s import bill

India, the world’s third largest oil consumer, said it is keeping a close watch on the rapidly developing situation with drone strikes on the world’s biggest oil producer, Saudi Arabian Oil Co., or Saudi Aramco, disrupting around 5% of global oil supplies and further worsening tensions in the Persian Gulf.

The reported strikes by 10 drones at Abqaiq and Khurais oil facilities, have disrupted more than half of Saudi Arabia’s oil capacity or 5.7 million barrels per day (mbpd). The US has blamed Iran for the attacks even as Yemen’s Houthi rebels claimed credit. Some oil traders have already begun to speculate if oil prices will cross the $100-mark yet again. “We are keeping a close watch,” said an Indian government official, seeking anonymity.

Saudi Arabia accounts for about one-tenth of global crude supply of 100mbpd and is the second largest supplier of crude and cooking gas to India.