India Has Become More Resilient To Disruptions In Crude Supplies

Crude Oil
Source: Deccan Herald

India’s energy security is mostly dependent on oil imports due to the limited availability of oil resources in India. Nearly 85 % of India’s oil requirements consist of imports. This excessive import dependency makes India’s energy security vulnerable to external supply shocks. The external supply shocks are most likely a result of geopolitical factors.

The Problem

Traditionally, a large part of India’s Oil Imports has come from the West Asia Middle East range. These suppliers include Saudi Arabia, Iran, Iraq, Kuwait, Oman, etc. The constant volatility and tensions in West Asia and Middle East Ranges have the potential to disrupt the Crude oil supplies to India. The disruption in Crude oil supplies to India directly affect India’s energy security. Several key oil-producing countries in the middle east suffer from political instability. The region is also affected by several Civil Wars and Conflicts such as the Israel-Palestine Conflict, the Civil war in Yaman, the Syrian Civil war, etc. The terrorism and proxy wars in this region also affect the export of Crude oil from this region. These tensions also affect the supply of oil from the Strait of Hormuz.

Strait of Hormuz
Source: Policy Lab

Since a large part of India’s import come from this region, it has a direct impact on India’s energy security. Upon these geopolitical factors, the COVID- 19 Pandemic has again exposed India’s vulnerability to such external supply shocks and pricing shocks. For safeguarding India’s energy security from external shocks, the Government of India is looking to diversify its sources of oil imports.

Diversification of Sources

Instead of relying excessively on the Middle East and West Asian countries, India is looking to import from other major producers as well, such as Russia. Russia has massive reserves of Crude Oil and Natural Gas in its far east region. And India is looking to exploit this in collaboration with Russia.

India is also looking to tap into the Shale Gas reserves of the United States. Today, the US has emerged as a significant energy producer because of its massive Shale gas reserves.  India is looking to capitalize upon its good relations with the United States to diversify its energy sources.

Apart from this, India has also begun to source oil and energy from various key producers in Africa and Latin America, such as Nigeria, Venezuela, etc. Exporting oil and energy from these countries is going to be more expensive because of transportation and logistics costs. The Imports coming from West Asia and the Middle East are comparatively cheaper. But the diversification of energy sources is very much needed to make India’s energy security more secure. And to shield from being so vulnerable to external supply shocks, especially those caused by geopolitical factors.


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