Petrol price hike
Raghuram Rajan Assures that India Sufficient Oil Reserves to Deal with Iraq CrisisReuters/Rupak De Chowdhuri

Iraq is being surrounded by crisis and violences and the Indian Finance Secretary, Arvind Mayaram said on Saturday that the government is watchful and there is no need to panic regarding oil supplies in India.

"We are hopeful that Iraq crisis will blow over. The markets must remain calm and there is no reason to panic," Hindubusinessline quoted Mayaram.

Around 65 percent of India's crude oil requirements are met through imports. The government is aware of the crisis in Iraq, which is second-largest oil supplier after Saudi Arabia. "I don't see any disruption in that. We need to remain calm and the Government is fully watchful of situation," he added.

"I am very confident that with the measures Government is now taking and the growth impulses that we are seeing in the economy, inflation must come down further," he said

The price of Brent crude oil jumped to $113 per barrel on Friday, recording nine-month high since September. However, crisis in Iraq have only affected a particular region of oil fields and have not stretched any major oil fields in South Iraq. The US President Barack Obama had said that his national security team 'is looking at all the options' to help the Iraqi government.

Iraq is the world's fifth largest country with proven reserves and pumps, and in April 2014, the country was producing almost 3.5 million barrels per day that commensurate about four percent of global supply.

According to Organization of the Petroleum Exporting Countries (OPEC), India imported 3.70 million barrel per day in 2013 and it is expected to reach 3.79 mb/d by the end of the year.

The statistics prove that the oil demand rose to 3,912 thousand barrels per day in 2014 from 3,881 thousand barrels per day in 2013. Hence, it has witnessed a change of 31 tb/d in one year.

However, oil and gas price index recorded ₹11,361.96 ($192.55) with a decline of ₹ 220.42 ($3.69) on Friday in BSE Market.