Asian countries that have largely been depended on imports for their oil reserves, are likely to be hit hard due to attacks on Aramco's oil production units. Since supply lines extend over oceans, shortfalls could be just a few days away. Fuel price in India itself is currently at its steepest post the budget.
Saudi has already told Indian and Chinese buyers that they won't be able to ship as much light-grade crude as ordered. They will, however, deliver a heavier crude. Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, said the kingdom will restore lost oil production by the end of the month. China, Japan and South Korea have been decreasing their oil dependency from Venezuela and Iran, which have been hit by US sanctions.
“Where would you find a company in this whole world that went through such a devastating attack and came out like a phoenix?” Prince Abdulaziz bin Salman said about the state-owned Saudi Aramco, which was the target of the attacks. He added that the capacity would be up to 11 million barrels per day by the end of September.
Though Yemeni Houthis have claimed the attack, Saudi and US have expressed that they suspect Iran to be behind the attack. To ensure security and that trade effort aren't thwarted, Saudi has decided to enter the International Maritime Security Construct, that includes the Strait of Hormuz, the world's most critical waterway for oil supplies, the Strait of Bab al-Mandab, the Gulf of Oman and the Persian Gulf.
The US in the meantime seeks UN action on the government-owned oil processing units, Aramco.
The attacks have knocked out roughly half of the country’s crude production, amounting to nearly 5 per cent of global output. Global oil prices closed at a 15 per cent more, the largest one-day percentage increase in three decades.
As per official data, Japan, which relies on Saudi Arabia for about a third of its oil, has 230 days’ supply of oil stockpiles and would consider releasing some of it, if necessary.