How Can India Safeguard Oil and Gas Supply Chains Amid Geopolitical Uncertainties?
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Synopsis
As India’s economy anticipates significant growth, the need to ensure the resilience of oil and gas supply chains becomes crucial. A new report underscores the challenges posed by geopolitical instability and market fluctuations, emphasizing the importance of strategic energy planning.
Key Takeaways
- India's crude oil imports exceed 85%.
- Geopolitical instability threatens supply and pricing.
- HELP policy enhances exploration and licensing.
- Industrial sector is the largest energy consumer.
- Potential offshore discoveries could reshape the market.
New Delhi, June 20 (NationPress) India is anticipated to achieve a growth rate exceeding 6% annually, and with its primary energy demand projected to rise at a CAGR of 5.5%, it becomes critical to protect oil and gas supply chains in light of escalating geopolitical and market uncertainties, as indicated in a report published on Friday.
More than 85% of India’s crude oil requirements are fulfilled through imports, establishing the nation as the third-largest oil importer globally.
According to the report by the PHD Chamber of Commerce and Industry (PHDCCI), “Geopolitical turmoil, particularly in key areas like the Hormuz Strait and Suez Canal, jeopardizes stable crude supply and pricing.”
Forecasts suggest that Brent crude prices will decrease from $81 per barrel in 2024 to $66 per barrel by 2026, attributed to supply growth outside OPEC+ and moderate demand increases.
“The trajectory of India’s economic growth necessitates resilient and diversified energy sources. This report outlines a comprehensive strategy to tackle future energy challenges while ensuring affordability, accessibility, and sustainability,” remarked Hemant Jain, President of PHDCCI.
As of 2023, the industrial sector accounts for approximately 40% of India’s total energy consumption, making it the largest energy-consuming sector.
“In the past thirty years, industrial energy demand has tripled, and the sector represents around 36–38% of final energy usage,” noted the report.
Currently, domestic oil and gas production is concentrated in Assam, Gujarat, Rajasthan, Mumbai High, and the Krishna Godavari Basin.
The Hydrocarbon Exploration and Licensing Policy (HELP), initiated in 2016, has streamlined approval processes and offered attractive fiscal terms, thereby enhancing licensing and exploration activities.
As of mid-2024, 144 blocks covering about 243,000 km² have been awarded, although international firms have largely steered clear, opting for nations with more appealing conditions.
Offshore production is poised to increase due to additional contributions from ONGC’s deepwater KG-D5 project between 2025 and 2030.
However, growth in offshore (and overall) gas supply will be moderated by plateauing output from KG-D6 fields and declining yields from legacy assets like ONGC’s Mumbai offshore fields.
Recent reports suggest that India might be nearing a groundbreaking offshore oil discovery in the Andaman Sea, potentially holding up to 184,440 crore litres of crude oil, rivaling Guyana’s significant discovery, as hinted by Union Petroleum and Natural Gas Minister Hardeep Singh Puri.
Projections indicate that India’s natural gas production is expected to rise to 54.7 BCM by FY 2029-30.
Point of View
The report highlights the imperative for India to bolster its energy security amidst geopolitical challenges. As the nation strives for economic growth, it must prioritize the diversification and sustainability of its energy sources to mitigate risks and ensure a stable supply.
NationPress
20/06/2025
Frequently Asked Questions
What percentage of India's crude oil is imported?
Over 85% of India's crude oil needs are supplied through imports.
What are the main challenges to India's oil supply?
Geopolitical instability in key regions like the Hormuz Strait and Suez Canal poses significant risks to consistent crude supply and pricing.
What does the Hydrocarbon Exploration and Licensing Policy (HELP) entail?
HELP, launched in 2016, simplifies approval processes and offers attractive fiscal terms to boost licensing and exploration activities in the oil and gas sector.
What is the projected growth of India's natural gas production?
India's natural gas production is expected to rise to 54.7 BCM by FY 2029-30.
Where is India's oil and gas production primarily located?
India's domestic oil and gas production is mainly in Assam, Gujarat, Rajasthan, Mumbai High, and the Krishna Godavari Basin.
