Skip to main content

India's reliance on oil and gas imports

(An Oil Rig in Middle of Body of Water - Photo by Kayden)

India is the world's most populated country and the world's third largest consumer of oil. With its fast-growing economy and rising energy demands. India encounters a tremendous challenge in servicing its oil needs. This article investigates the reasons that contribute to India's reliance on imported oil, the challenges it creates, and the potential prospects for the country to lessen its reliance on imported oil. 

In 2023, India imported 87.3% of its crude oil. This is a significant rise from the previous year's 85.8%. Saudi Arabia, Iraq, and the United Arab Emirates were India's primary oil suppliers in 2023. These nations supplied 64.6% of India's total oil imports, not taking into account the imports from Russia and other sources. 


Let us look at some factors driving India's reliance on Oil Import

India's growing population, economic growth, urbanisation, and an expanding middle class have led to a surge in energy consumption. With increasing vehicle ownership and industrial activities, the demand for oil has grown substantially. Despite efforts to boost domestic oil production, India's reserves are limited and mainly concentrated in regions with logistical and environmental challenges. While in 2023, India's oil refining capacity is 249.22 million metric tonnes per annum (MMTPA). After the United States, China, and Russia, India is now the world's fourth largest oil refiner in the world. from 100 MMTPA in 2000, India's refining capacity has increased dramatically in recent years. But India's refining capacity is yet to keep up with its growing energy needs. 

This deficiency forces the country to import a significant portion of its refined petroleum products, adding to its oil import bill. India's geographical location and geopolitical dynamics affect its oil import dependency as well. Limited access to diversified sources and vulnerability to supply disruptions in the Middle East and other major oil-producing regions further contribute to its reliance on imports. India's oil imports have been disrupted numerous times in the past; some examples below.
  • Unrest in regions that produce oil, like the civil war in Libya in 2011, caused a sharp reduction in oil supplies from the nation, which had previously been a key supplier to India.
  • Natural disaster, such as Hurricane Katrina in 2005, disrupted oil production in the Gulf of Mexico, affecting India's oil supplies significantly.
  • Another important reason of oil supply disruptions is war. The US-led Iran-Iraq War in the 1980s resulted in a rapid spike in oil prices, which had a significant influence on India's economy.
  • Economic sanctions also cause problems in oil supply. For example, the United States' sanctions against Iran in 2018 resulted in a dramatic drop in oil shipments from Iran, which had previously been a major supplier to India.
  • Technical issues such as pipeline breaches and refinery outages, a pipeline breach in Nigeria in 2019 resulted in a steep decline in the country's oil exports, which had a substantial influence on India's oil supplies.

Let's examine the challenges posed by oil import

India's substantial oil import bill puts pressure on its trade balance, currency exchange rates, and foreign exchange reserves. Fluctuating oil prices adversely impact the economy, leading to inflation and an increased fiscal deficit. Heavy reliance on oil imports raises huge concerns about energy security. Geopolitical tensions, disruptions in supply chains, or global oil market fluctuations pose risks to India's energy stability. India's dependence on oil imports exacerbates its carbon emissions and environmental challenges. The combustion of fossil fuels contributes to air pollution, greenhouse gas emissions, and climate change, making India the world's third most polluted country. Therefore, reducing oil import dependency is crucial for India's transition to cleaner and more sustainable energy sources.


Opportunities for reducing Oil Import

Promoting domestic exploration and production is the way to go, encouraging investment in advanced exploration technologies and tapping into untapped domestic oil reserves can help increase India's self-sufficiency. Improved regulatory frameworks, streamlined processes, and incentives for domestic oil exploration could enhance production capacity. Collaborating with oil-producing nations, international organisations, and energy forums can provide opportunities for securing long-term oil supplies at favourable terms.


India's new oil reserve discovery

The state-owned oil and natural gas corporation (ONGC) has discovered new oil reserves in the Arabian Sea just off the coast of Mumbai. The discovery was made in the Amrit and Moonga blocks, which ONGC recently acquired via open acreage licensing rounds. The Amrit block is located in the Mumbai High field, which is one of India's most productive oil and gas fields. The Moonga block is located west of Mumbai High in a region that has not before been investigated for oil and gas. ONGC has made a number of big oil and gas discoveries in recent years, including in the Krishna Godavari basin in the Bay of Bengal. The fresh oil finds in the Arabian Sea are a good thing for India. The finds may assist India in reducing its reliance on imported oil and improving its energy security.


The changes observed 

A rise in recent initiatives for implementing energy-efficient practices across industries, transportation, and infrastructure is also seen, which will further reduce oil consumption. Promotion of energy-efficient technologies, electric vehicles, and public transportation systems to significantly curb the demand for oil is also observed.

However, India is likely to continue importing a large amount of oil in the coming years. The country's rising population and economy will continue to drive its demand for oil, and domestic production is unlikely to keep up. While India is engaging in strategic partnerships, exploring bilateral agreements, and leveraging its diplomatic ties to ensure a reliable and diversified supply chain, we still have a long way to go.

Labels:

Comments

Post a Comment

Popular posts from this blog

The Art of Enjoying the Rains

The rainy season has a special beauty and allure thanks to the pitter-patter of raindrops, the earthy scent of wet soil, and the rhythmic waltz of water droplets coming from the sky. There is something wonderful about the rain that captures our senses, regardless of whether you live in a tropical area or in a cooler climate with rare downpours. So to truly immerse ourselves in the beauty and serenity that this season has to offer, we shall explore the numerous methods to embrace and appreciate the rain in this article. A chance to reclaim connection to nature in its most basic form is offered by the rains. A symphony of noises will surround you if you take the time to stroll outside during a light drizzle or a strong rainfall. The melodic orchestra created by the rustling leaves, gushing streams, and peaceful patter of showers on diverse surfaces may be both restful and energising. We can experience a sense of peace and serenity that is frequently lacking in our fast-paced life by allo
Post a Comment
Read more

CIA's 1967 Attempt at Weaponizing Lightning

Photo by Pixabay The history of military research is filled with intriguing projects that push the boundaries of technology and imagination. Several fascinating initiatives that push the limits of technology and imagination may be found throughout the history of military research. The Central Intelligence Agency's (CIA) obscure attempt to weaponize lightning in 1967 is one of these endeavours. This clandestine program sought to harness nature's destructive force and use lightning as a weapon. Lets look at the CIA's bold attempt to weaponise lightning in this shorticle, including its ethical ramifications, tactics, and historical context. History Lesson Military superpowers relentlessly researched novel and cutting-edge weapons all through the Cold War. During this time, the CIA started a covert mission to weaponize lightning. Controlling lightning strikes would have provided a clear advantage in covert operations and intelligence gathering, which fueled the agency's int
Post a Comment
Read more

The Power of Deleting Unused Contacts from Your Phone

In our digital age, our smartphones have become extensions of ourselves, holding vast amounts of information, including our contacts. However, have you ever stopped to consider the mental clutter that unused contacts may be causing? Just as we declutter our physical spaces to create a sense of calm and order, it's equally important to tidy up our digital spaces, starting with our contact lists. The Mental Weight of Unused Contacts Think about it: How many contacts do you have saved in your phone that you haven't spoken to in months, or even years? Each unused contact takes up precious mental space, cluttering your mind with unnecessary information and reminders of past connections.  Every time you scroll through your contacts, you may come across names that trigger memories, emotions, or even stress. Whether it's a former colleague you had a falling out with or an old friend you've drifted apart from, these unused contacts can serve as constant reminders of unresolved i
Post a Comment
Read more