Vision EnrichIndia imports ~90% of its crude oil, with Russia (35%), Iraq (20%), and Saudi Arabia (15%) as top suppliers. The U.S. share has risen to 8%, while Brazil and Nigeria contribute 7%. OPEC’s share is now below 50%, indicating growing diversification.
With Russia’s oil discount shrinking from $8–10 to $2–3/barrel and U.S. tariff pressures rising, India must diversify to ensure energy security.
Why diversify?
- Reduces geopolitical supply risks
- Boosts bargaining power
- Improves refinery efficiency with varied crude grades
- Lowers sanctions-related compliance risks
- Enhances hedging against price volatility
Challenges:
- Higher costs from distant suppliers
- Refinery compatibility issues
- Longer logistics, higher freight & insurance
- Geopolitical exposure
- Inadequate storage and tanker capacity
Way Forward:
- Set supplier share caps to avoid over-reliance
- Upgrade refineries for multi-grade processing
- Expand energy diplomacy with Latin America, Africa, ASEAN
- Sign flexible long-term contracts
- Strengthen logistics infrastructure – tankers, ports, reserves
India’s heavy dependence on crude oil imports makes import diversification a strategic imperative. As discounts from Russia shrink and global trade tensions rise, relying on a few sources poses significant economic and geopolitical risks. By broadening its supplier base, modernizing infrastructure, and strengthening international energy partnerships, India can enhance its energy security, stabilize import costs, and build resilience against global market shocks. A balanced, forward-looking diversification strategy is not just an option — it is essential for India’s sustainable and self-reliant energy future.
