India Bolsters Energy Security Through Strategic Diversification Amid Global Supply Disruptions
As global energy markets grapple with the fallout from the ongoing conflict in Iran, which effectively shuttered the vital Strait of Hormuz on February 28, India has demonstrated remarkable resilience. By proactively diversifying its supply chain, the South Asian nation has managed to avoid the energy rationing and shortages that have plagued other economies.
Neeraj Mittal, Secretary of India’s Ministry of Petroleum and Natural Gas, stated that the government’s long-term energy sourcing strategy has served as a critical buffer during the current crisis. While Russia remains a primary supplier, India has successfully expanded its crude oil intake across 43 countries, including new import arrangements with nations like Venezuela.
A Buffer Against Global Volatility
The closure of the Strait of Hormuz—a chokepoint that previously facilitated roughly 20 per cent of global energy flows—has triggered significant volatility in international markets. With global benchmark Brent crude currently hovering near $105 per barrel, many importing nations have faced soaring costs and demand destruction.
In contrast, India has managed to limit the price impact on its domestic market to just a 7 per cent increase since the onset of the crisis. “There were no shortages, no rationing, and as we speak, India is perhaps the only country where energy demand is still growing,” Mr. Mittal noted.
India’s reliance on imported crude has reached over 90 per cent in fiscal year 2026, up from 55 per cent in 1999. To mitigate the risks associated with this dependency, the government has rapidly pivoted its sourcing strategy. A notable example is the surge in Liquefied Petroleum Gas (LPG) imports from the United States, which has grown from 10 per cent at the start of the year to 67 per cent today.
The UAE: A Cornerstone of Energy Partnership
Amid the shifting geopolitical landscape, the United Arab Emirates (UAE) has solidified its position as a cornerstone of India’s energy security. The UAE currently accounts for roughly 15 to 20 per cent of India’s total energy imports, supplying 25 per cent of its LPG, 10 per cent of its LNG, and 15 per cent of its crude oil.
Bilateral cooperation is deepening beyond immediate supply requirements. Following Prime Minister Narendra Modi’s visit to the UAE in May, an agreement was finalized with the Abu Dhabi National Oil Company (ADNOC) to expand crude oil storage capacity in India to 30 million barrels. Discussions are also underway regarding potential storage opportunities in Fujairah, further cementing the two nations’ energy alliance.
“Risk resilience can only grow when you have dependable partners across the world,” said Mr. Mittal. “The UAE is one of the top partners in that effort.”
Moving Toward Long-Term Self-Reliance
While immediate supply stability remains the priority, New Delhi is simultaneously accelerating its push for domestic self-reliance. To balance the heavy reliance on foreign crude, the government launched a $9 billion ultra-deep-water exploration initiative in July. Furthermore, a $2.5 billion investment into converting waste into biogas underscores a commitment to broadening the nation’s energy mix.
For Mr. Mittal, the ultimate goal is stability. “I am more worried about the volatility than the absolute levels of crude,” he remarked, emphasizing that these strategic investments are designed to provide the predictability required for India’s fast-growing economy to thrive despite the unpredictable “black swan” events currently unsettling global energy trade.
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