"There is no situation as yet for panic, and everything is under control," a ministry official said, speaking on condition of anonymity. (Agencies)
"Crude oil supplies to India come from Iraq's Basra oilfields, which are far from the conflict zone in the north-east of the country. Loading of tankers from the Basra oil terminal is continuing normally," the official added.
Iraq is India's second largest crude oil supplier behind Saudi Arabia, supplying about 25 million tonnes (MT) in 2013-14, to meet over 13 percent of India's needs. Saudi Arabia was the largest supplier at around 38 MT.
For the current year, state-run oil marketing companies (OMCs) planned to import 19.4 MT, of which 18.7 MT by Indian Oil Corp (IOC) and Hindustan Petroleum (HPCL).
"These two companies have already lifted 50 percent of the contracted quantity," the official said. The balance of less than one billion tonnes will be imported by other companies.
The ministry has, however, asked OMCs to prepare a contingency plan to meet any supply disruptions from Iraq by exploring other suppliers in the Middle East and elsewhere.
The official pointed out that while there was some rise in oil prices immediately after violence broke out in Iraq, the subsequent fall in international market rates, like for Brent crude and West Texas Intermediate, indicated that the disturbed situation there may not affect India's oil imports.
The ministry's Petroleum Planning and Analysis Cell Monday reported that the international crude oil price of the Indian basket went down to USD 110.42 per barrel on the last trading day Friday from Thursday's price of USD 110.66 per barrel.
Market analysts predict an impact on prices if the conflict in Iraq continues and supplies from south Iraq are disrupted.
If crude prices increase further or sustain at elevated levels for the rest of the current fiscal, the fall in gross under-recovery (or losses that OMCs incur on selling petroleum products below cost) from Rs.139,869 crore in 2013-14 to the projected Rs.91,665 crore for 2014-15 may not take place, said ratings agency ICRA in a report.
"There is no situation as yet for panic, and everything is under control," a ministry official said, speaking on condition of anonymity.