Why is India looking to diversify its crude supply?
India’s dependence on a few countries for crude oil makes it vulnerable to geopolitical instability and price volatility.
Diversifying sources ensures a stable and resilient supply chain, reducing the risk of disruptions from any single supplier.
It helps India manage fluctuating global oil prices by sourcing from multiple markets.
The move aligns with India’s long-term energy security strategy, balancing the transition to clean energy while ensuring economic stability.
Who are its largest suppliers and how much crude oil does it import?
India traditionally imports oil from West Asia but has increasingly turned to Russia, which now accounts for 40% of its crude oil imports.
India imports crude from the U.S., with exports rising from 221,000 bpd in 2023 to 357,000 bpd in early 2024.
Other significant suppliers include Brazil, Argentina, Suriname, Canada, and Guyana, providing India with diversified options.
In 2023-24, India imported 234.26 million tonnes of crude, meeting almost 88% of its demand through imports.
The increased supply from diverse sources helps India balance energy security and price stability.
How is the government balancing the needs of its energy transition and its energy security?
India aims to reduce crude oil imports while promoting cleaner energy sources such as renewable energy, LNG, and biofuels.
The government is focusing on increasing domestic natural gas production and enhancing its infrastructure to reduce reliance on oil.
Investments in renewable energy (solar, wind, hydropower) and the promotion of electric vehicles are key components of India’s energy transition strategy.
The shift towards ethanol blending and compressed biogas helps India decrease dependency on crude oil.
Ensuring supply diversification from sources like the U.S., Russia, and new producers (Brazil, Canada, etc.) strengthens energy security during the transition to cleaner fuels.
What role is America going to play?
The U.S. is becoming a key energy partner for India, with energy exports set to rise from $15 billion to $25 billion.
The U.S. is a significant supplier of crude oil, liquefied natural gas (LNG), and petroleum products to India.
As global LNG supply grows, the U.S. plays a major role in fulfilling India’s natural gas needs, supporting its energy transition.
U.S.-India energy cooperation strengthens bilateral ties and contributes to India’s energy security goals.
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