NEW DELHI, June 10: India has only limited oil stocks and could easily find itself in a crisis situation if it went to war against Pakistan because its traditional suppliers of crude oil are mainly in the Middle East, an industry expert warned on Monday.

“Much of (India’s) oil imports are concentrated in sensitive parts of the world,” said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI).

The FICCI on Monday released a report on a special study carried out into India’s oil security.

“In the wake of the current standoff between India and Pakistan, the possibility of an oil shock poses a major concern for India,” said the report.

Since India imports nearly 70 percent of its oil needs, a crisis in any of its major oil-supplying countries could also jeopardise its war effort, the report said.

India derives 61 percent of its oil from the Middle East, which could support Pakistan in case of a conflict.

“The west Asia/Persian Gulf region is perceived as one of the most volatile and unstable,” the report said.

Industry officials said India, unlike developed nations such as the United States and Germany, lacked a dedicated stock of strategic oil reserves which could be used in an emergency.

The FICCI said India would need to spend about a billion dollars to build up an oil reserve of 4.5 million tonnes, which should be stored at all times.

“For India, oil reserves would be an important line of defence,” one expert said.

“Present geopolitical uncertainties both in our immediate neighbourhood as in the Middle East have been creating oil price fluctuations,” the report noted.

India suffered badly during global oil shocks and during the Gulf War its oil import bill shot up by 50 percent, it added.

At the moment, India’s oil reserves are made up of the “floating stock” of individual companies which fluctuate, industry officials said.

Indian Petroleum Minister Ram Naik said last month that India had enough oil reserves to meet the requirement of consumers and the armed forces in case of a war with Pakistan.

“We have enough supplies to face any eventuality. There would not be any shortages,” Naik said, adding that the supplies could last 60 days.

But industry sources questioned his estimates saying the minister had not revealed the volumes the country has in reserve.

It said India could be in trouble economically from a global oil shock even if there was no war with Pakistan.

“The general mood in Indian industry is that should an oil shock occur, it would have a significantly adverse effect on the economy; over three-fourths believe the impact would be felt across the economy,” the FICCI said quoting a survey, which it carried out.—AFP