Where does India get its Oil Supply?

India is set to cross the $100 billion mark in oil imports in the current fiscal. While it has already spent $94.3 billion in the first ten months, the total oil imports are expected to touch $105-110 billion by the end of the financial year. 

India’s Crude Oil landscape

Here are some important facts about the oil and natural gas industry in India:

A country with over 1.4 billion people, India imports around 84% of its crude oil needs. Also, India is the third-largest oil consumer and importer in the world. With a marked increase in oil prices, increase in imports, and decline in domestic oil production, India’s crude oil import bills are rising. 

LNG, which is about one-fourth of the total gas demand in India, is also imported to a large extent. India is the fourth-largest importer of LNG too. There is a growing demand for oil and natural gas in India. 

How does India cater to its oil requirements?

1. Domestic Oil Exploration and Production
2. Imports

India imports around 84% of its crude oil needs. And the year-on-year, it has been on the rise. 

Domestic production is deficient compared to the demand in the country. The Government is taking measures to reduce high oil prices due to excessive imports. And the total amount spent on these imports is expected to touch $110 billion.

Let’s look at where we import oil to meet this demand.

Where does India import oil?

India imports most of its oil from the Middle East, with Iraq and Saudi Arabia being primary. Here is a quick look at India’s crude oil imports according to regions in 2021:

1. Middle East: 52.7%
2. Africa: 15%
3. United States: 14%

Which countries does India import most of its oil?

Here are the top five countries where India imports most of its crude oil from:

1. Iraq
2. United States
3. Nigeria
4. Saudi Arabia
5. UAE

List of Oil Stock in India

Oil India Ltd Stock
Indian Oil Corporation Ltd Stock
Oil and Natural Gas Corporation Ltd Stock

OPEC and OPEC+ countries

The Organization of the Petroleum Exporting Countries or OPEC consists of 13 major players in the global oil industry. The primary objectives of OPEC were:

• Coordinating and unifying petroleum prices across member countries
• Ensuring the stabilisation of oil markets
• Securing an efficient, regular, and economical supply to consumers
• Ensuring that producers and companies investing in the industry get a fair return on their investments

| Algeria | Angola | Equatorial Guinea | Gabon | Iran | Iraq | Kuwait | Libya | Nigeria | The Republic of Congo | Saudi Arabia | The United Arab Emirates | Venezuela |

In 2016, a larger group was formed called OPEC+ to increase the organisation’s control over the global crude oil market. These non-OPEC countries are:

| Azerbaijan | Bahrain | Brunei | Kazakhstan | Malaysia | Oman | Russia | Sudan | South Sudan |

These countries help major importers like India diversify their energy import basket and get oil at reasonable prices. While India is still primarily importing from OPEC countries, oil imports from the United States are now the second-largest in India. In 2020, India signed a contract with Russia to source crude oil. India is looking for cost-efficient avenues to meet its increasing oil demand with increasing oil prices.

Who are the major exporters of oil in the world?

Globally, oil is the most exported product. While Saudi Arabia was the largest oil exporter, the UAE and the US have increased their share in recent years. Here is a quick look at the top ten oil-exporting countries in the world that account for nearly 75% of the world’s oil exports (2019 data). 

Measures to reduce oil imports

The Government is aware of the increasing costs of oil. Here are some steps that the Government plans to take to reduce the dependency on imports for its energy needs.

• In 2021, the Government approved an order that allowed 100% Foreign Direct Investments (FDIs) under the automatic route for all oil and gas PSUs.
• The government regularly announces subsidy plans to reduce the pressure of increasing oil prices on people.
• Coal Bed Methane is being explored as an alternative source for India’s energy needs.
• The Government is also using Underground Coal Gasification to meet its energy demands internally.
• The Government initiated the National Gas Hydrate Programme (NGHP) to map gas hydrates as an alternate source of energy.
• To boost its exploration efforts, India has launched an Open Acreage Licensing Policy (OALP)