Global energy jitters: Why India is not panicked yet

I have lived long enough to know that when the world begins shouting about oil, trouble is never far behind. Oil has always been more than fuel. It is politics, war, diplomacy, and occasionally hypocrisy — all distilled into a barrel.

These days, the world is once again agitated about oil and gas. Prices are rising in many countries. Governments are fretting about supply lines. Strategic waterways are suddenly back in the headlines. It reminds one that modern civilisation runs not only on electricity and ambition, but also on tankers quietly sailing across troubled seas.

What makes the present moment interesting is that while much of the world is anxious, India appears relatively unruffled.

That is not something I say lightly. India, after all, imports about 85 percent of its crude oil requirement. Our daily need is roughly five million barrels of oil. Of this, we produce a little less than one million barrels ourselves. The rest must come from abroad. In simple arithmetic, that makes us vulnerable.

Yet vulnerability does not always translate into crisis.

Part of the reason lies in the curious twists of global geopolitics. When the Russia–Ukraine war erupted, Western countries imposed sanctions on Russian oil. Many expected India to join the moral chorus. Instead, India did what practical countries usually do — it looked at the discount.

Russian crude began arriving in larger quantities. Today it forms a substantial portion of India’s imports, sometimes approaching 40 percent. It caused some diplomatic discomfort in certain capitals, but it also kept Indian refineries humming and fuel prices relatively stable.

In matters of energy, sermons rarely substitute for supply.

India’s refining capacity is another quiet advantage. The country has built one of the largest refining systems in the world — second only to the United States in scale. This means India does not merely import oil; it refines it and exports petroleum products as well.

There is a certain elegance in that arrangement. We buy crude from various corners of the world, refine it in our own facilities, meet domestic demand, and still have an extra 10 to 20 percent capacity to export refined fuel. Petroleum products, in fact, are among India’s largest exports.

The story becomes even more interesting when one considers the present gas shortage concerns.

A disruption at the Ras Laffan terminal in Qatar — located near the massive North Gas Field — tightened supplies in international markets. Ras Laffan is not just any port; it is one of the world’s major LNG export terminals. When something goes wrong there, energy markets everywhere take notice.

India too felt the ripple.

But here again, some quick manoeuvring helped. Three cargoes — one carrying crude oil and two carrying LPG — were successfully moved through the region. Each carried more than 100,000 tonnes. That alone covered roughly a month’s expected shortfall.

More supplies are on their way. Gas shipments contracted from the United States will take about 40 to 45 days to arrive. Cargo from Russia will reach earlier, in roughly 15 to 20 days. Until then, the country is managing with available buffers.

Oil, interestingly, is less of a worry than gas at the moment.

Another factor that deserves mention is diplomacy — that old craft which consists largely of talking politely to people who do not like each other.

India has managed to keep channels open with almost everyone: the United States, Russia, Gulf countries, and even Iran. This balancing act may look untidy to those who prefer neat alliances, but it serves a practical purpose.

Recently, three Indian tankers carrying large quantities of crude — each above 100,000 tonnes — were able to move safely through a tense region. That kind of passage does not happen merely because ships are large. It happens because diplomacy quietly clears the route.

Energy security, like good manners, often works best when it is understated.

Of course, the longer-term question remains: can India reduce its dependence on imported oil?

The government has tried to address this through changes in exploration policy. Earlier, exploration contracts were based on profit-sharing between companies and the government. That system had a habit of producing disputes — companies argued about costs, governments argued about profits, and exploration slowed down.

The new model focuses on revenue sharing instead. It is simpler. Companies share a portion of revenue directly rather than arguing about profits after expenses. Investors generally prefer clarity to quarrels.

Since this shift, exploration activity has increased. New blocks are being auctioned, and companies are showing interest again.

The most intriguing developments are in the Andaman Sea basin. Preliminary indications suggest the possibility of large hydrocarbon reserves there. Some comparisons have been drawn with Guyana, where recent discoveries have proven reserves of about 11 billion barrels.

Guyana, a country most people could barely locate on a map a decade ago, now exports around five million barrels per day because of those discoveries.

India currently produces less than one million barrels per day — all of which is consumed domestically. If anything remotely similar were found in Indian waters, it would change the arithmetic of our energy dependence.

Meanwhile, refining capacity continues to expand. A major refinery being built by Hindustan Petroleum at Pachpadra in Rajasthan, near Balotra district and not far from Jodhpur, will soon add several lakh barrels per day to the country’s processing capability.

Such additions strengthen India’s position as a refining hub.

Taken together, these developments explain why India appears calmer than many other countries during the present global oil jitters.

This does not mean we are immune. No country importing 85 percent of its crude oil can claim immunity. But energy security is not about removing every risk. It is about ensuring that when the world panics, you have enough time to think.

At the moment, India seems to have bought itself that time — through diversified imports, strong refining capacity, diplomatic flexibility, policy reforms in exploration, and steady expansion of energy infrastructure.

In the unpredictable theatre of global oil politics, that is not a bad position to be in.