Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, recently expressed confidence in India’s readiness to meet its escalating energy demands through a diverse range of oil sources. Puri highlighted the significant expansion of India’s procurement base, increasing from 27 suppliers to 39, which underscores the country’s strategic position within the global oil supply chain. He noted, “We are now buying from 39 sources, earlier we were buying from 27. Enough oil available and we have enough choices to exercise,” emphasizing India’s proactive measures to ensure energy security amidst global fluctuations.
In addressing potential market disruptions, Puri reassured that the global supply of oil currently exceeds consumption levels. He stated, “Our energy consumption has been steadily growing. Today there is more oil available in the world than there is consumption. If some parties hold back on availability, there are new suppliers in the market also. In the short-medium term, I don’t see any shortage of oil in the world.” This statement comes at a time when the global oil market faces scrutiny due to geopolitical and economic challenges.
Recent data indicates that Russian crude oil comprised a record 44% of India’s total oil imports in July 2024, peaking at 2.07 million barrels per day (bpd). This reflects a 4.2% increase from June and a 12% rise compared to the same period last year. In response to growing domestic demand, India’s oil marketing companies (OMCs) plan to enhance the country’s crude oil refining capacity by 35-40 million tonnes (MT) by the end of fiscal 2030. This expansion is expected to elevate the total installed refining capacity to 295 MT.
As of October 2024, India’s crude oil imports have rebounded, rising 5.9% month-on-month to 18.53 million metric tons, after four months of declines. The average price of Indian basket crude oil in October was approximately $90.08 per barrel, showing slight decreases from previous months but reflecting stability in pricing. In October, India produced about 2.5 million metric tonnes of crude oil, marking a 1.3% year-on-year increase, while natural gas consumption saw a notable rise of 13.4%.
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India remains reliant on imports for over 85% of its crude oil needs and about 50% for natural gas. The growth in domestic petroleum product consumption, which has risen at a compound annual growth rate (CAGR) of 4% over the past decade, is primarily driven by increasing industrial activity and the upcoming festive season, necessitating higher imports.