Iraq war not to hit crude supplies: Naik

Indian refiners, who buy about 7,000 barrels a day of Iraqi crude from the spot market, have made alternative arrangements for supplies if there is a war in Iraq, Oil Minister Ram Naik said on Thursday.

"We can get supplies from other sources and we have enough stocks of crude oil and products," Naik told reporters after collecting interim dividends worth Rs 26.87 billion from state-run oil firms.

Officials said that if there was a war in Iraq, they expected OPEC power Saudi Arabia, which supplies 260,000 bpd to Indian refiners, to step up crude sales.

They were also in touch with alternative suppliers such as Brazil, Angola and Libya to make up for a possible shortfall.

"We have no fears. We are confident that we will have enough supplies," said M S Ramachandran, chairman of state-run Indian Oil Corp, the country's largest refiner.

"There is no government-to-government term supply arrangement with Iraq," he added.

Indian refiners have raised oil product inventories to meet demand for 35-40 days and have enough crude to keep refineries running for a month.

Government officials said India's foreign ministry had taken several diplomatic initiatives to ensure smooth supply of crude oil as the Middle East accounts for two-thirds of India's oil imports of 1.67 million bpd.

"Recently there has been a lot of diplomatic activity and visits of officials between India and the Middle East," one official said.

Iranian President Mohammad Khatami, who was in India last month, told a business seminar that Iran, which supplies 160,000 bpd to India, was "fully prepared" to raise crude supplies to India.

India's other main suppliers are Kuwait that sells 240,000 bpd and Nigeria, which provides 220,000 bpd. India has 17 refineries, which can process 2.3 million bpd.