Fears of a steep hike in the pump price of petroleum products, including petrol and diesel, following the drone attacks on the Saudi oilfields last week may be overstated.
There was a specific report a couple of days ago that talked of a five rupees per liter increase in the price of petrol. Mercifully, no official oil marketing sources lent any credence to it.
Besides, after the initial shock that the global supplies of energy from its biggest supplier could be disrupted for a considerable period of time, there are signs that the situation may not be as bad as initially feared.
Though half of the Saudi daily output of crude oil was affected in the simultaneous and synchronized multiple attacks by hundreds of drones on the Aramco-owned Khurais oilfield and Abqaiq oil processing plant, it constituted a mere five per cent of the total global demand.
The US said it was ready to meet the shortfall from its own daily production of shale oil and vast reserves. This immediately eased the pressure on the price of crude which had jumped steeply following the first reports of the drone attacks.
From the range of $ 62-66 a barrel before the attack the price had shot up to nearly $ 75 a barrel. But once the US offered to step in to replenish the shortfall, the prices were back to the pre-attack levels. And these are unlikely to witness a huge spurt, given the global economic slowdown and the rising production of shale oil in the US.
However, the drone attack holds out a much greater threat otherwise. Unless better sense prevails on all key players in the West Asian quagmire of multiple sectarian armed conflicts, a wrong move could trigger a huge conflagration dragging the entire region in the highly combustible fires.
For, the four-year-old war in Yemen, with the Saudis backing the government and Iran the rebel militia, the Houthis, is nowhere near coming to an end. The Houthis have claimed responsibility for the attack on the Saudi oilfields, though President Trump says that it came from the Iranians.
Indeed, Trump tweeted that the US was ‘locked and loaded’ immediately after the drone attack, accusing Iran of launching it, he has since tried to walk back from the scary scenario. Iran, on its part, has vehemently denied any role, while notifying its readiness to defend itself in case of an attack.
Despite the strictest possible economic sanctions imposed by Trump after he unilaterally withdrew from the Iran nuclear deal, Iran has shown courage and determination, refusing to wilt under the US pressures.
Meanwhile, in recent weeks the UAE has sought to distance itself from the Saudi-led effort to prop up the beleaguered regime in Yemen. The insurgent Houthis, a Shia sect of Islam, is backed by Iran in the broader Sunni-Shia conflict in West Asia for supremacy between forces led by Saudi Arabia on the one side and Iran on the other.
It is rather paradoxical in this context that though the Trump-led US extends ready support to Saudi Arabia in its single-minded pursuit of a supremacy in the region, he does not shy from inviting the Iranian leadership for talks without even the minimal groundwork.
Maybe it is his quest for a Nobel Peace Prize that impels him to wade into old and intractable conflicts from North Korea to Iran and even Kashmir that he often volunteers his services as a conciliator to the warring parties.
It is another matter that Iran’s President, Hassan Rouhani, has thumbed his nose at Trump’s offer while he is there in New York later this month in connection with the annual meeting of the UN General Assembly, saying unless the sanctions are lifted no purpose would be served by such a meeting.
Trump’s arbitrariness and his felt need to humor the Saudi dictator, Mohammad bin Salman, alone led him to withdraw from the eminently sensible nuclear deal with Iran which was struck with the full backing of the then US President Barrack Obama and all other major powers, including Russia, China, the UK and the European Union.
Thanks to the whimsical ways of Trump, West Asia is now a far more dangerous place than at any time in the previous decade under President Obama.
The Syrian war still rages on, though the West has clearly lost it, and Russia has emerged a major player in the region. Again, thanks to the implicit encouragement of Trump, Israel has become far more aggressive than before.
The Persian Gulf, including the Straits of Hormuz, through which half of the world oil passes, has become prone to attacks by rival powers following the Iran:US stalemate. In such a scenario, disruption in the supply of oil can happen without a moment’s notice.
Though for the present the danger has passed, India will have to prepare a contingency plan to meet any such eventuality due to uncertain conditions in West Asia.