Drone attack on saudi aramco Oil processing - full analysis and impact

Context

• Yemen based Shia Houthi rebels have carried out drone attacks and 2 major oil facilities.  - Abqaiq oilfield, khurais oilfield
• Set to reduced Saudi arabia's oil output by 50% and disrupt more than5% of global output.

Background

• Yemeni conflict -three ways conflict - 

1.  Saudi - UAE lead coalition
2. Shia Houthi rebels supported by Iran
3. southern transition council backed by UAE

• saudi arabia supplies 10% of global oil supply. and worlds largest crude oil exports
• definitely, the attack added to anxiety about the stability of the world's oil reserves.   

 impact of the attack - global

• suspend the production of almost 6 million barrel / day
• 6% of global oil supply 
• restrict the use of 2mbd of spare capacity.
• largest ever disruption in crude oil production in Saudi Arabia.
• anxiety about stability of the worlds oil reserves.
• geopolitical tension premium to the price of oil worldwide
• oil price rise
• the situation of "world oil crunch"

Impact of attack - India

• India is worlds 3rd largest oil importer
• Saudi Arabia is India's second-largest supplier of crude oil.
• 17% of country's export 
• India imports 80% of oil it consumes
• india's already trying to make up for the loss of supply from Iran after us sanctions.
• oil price may worsen the Indian govt's fiscal balance.

Really it's a bad news for india . 

recently, RBI governer shashikant Das said-

"india's current account &fical deficit could take a hit if oil prices continue to rise after an attack on saudi arabian oil facilities over weekend".

• India imports 36.8 million tonnes of crude oil from saudi arabis accounting for 16.7% of total imports in 207-2018.
• india provisioally imported 207.3 million tonne of crude oil in 2018-2019.
• iraq remains top supplier of oil to india.

what the US says?

• The US believes Iran is using the Yemen Houthi rebels to attack Saudi Arabia's oil facilities to gain leverage.
• Iran claims it has nothing to do with the Saudi aramco's attack.

possible impact

• The above turn of events is bound to affect several emerging economies, including india.
• higher fuel costs and imported inflation could also hurt the consumer at a time of a slowdown in the economy.
• India import more than 2/3rd of its oil from west Asia
• Dream of $5 trillion economies of India maybe take a longer time.