India’s dependence on imported crude oil remains high at around 90%, with recent geopolitical tensions in the Middle East prompting calls for diversification and increased storage capacity to bolster energy security.
India’s appetite for crude oil is still outpacing its domestic output, even as the wider energy import bill shows signs of easing. A joint study by the Confederation of Indian Industry and EY found that overall primary energy import dependence fell to 42% in FY25 from 47% in FY17, suggesting a gradual broadening of the country’s energy mix. But the same report also underlined the scale of India’s reliance on foreign crude, with about 90% of demand met by imports.
That dependence has been building for years. The Indian Express reported that crude import reliance reached a record 87.3% in FY23, up from 85.5% a year earlier, as fuel consumption rose and domestic production slipped. The Economic Times cited Petroleum Planning and Analysis Cell data showing the ratio climbing further to 87.8% in the April-to-August 2023 period, while the US Energy Information Administration said India imported 4.5 million barrels a day of crude oil and condensate in 2023, making it the world’s second-largest net importer.
The mix of suppliers has also shifted. According to the Energy Information Administration, Russia became India’s main crude source in 2023, supplying about 39% of imports, while the Middle East accounted for roughly 45%. That diversification has helped shield refiners from some shocks, but it has not removed the underlying vulnerability. A parliamentary committee reviewing crude import policy warned in late 2023 that heavy exposure to Middle Eastern supply remains a risk and urged broader sourcing to improve energy security.
Those concerns have sharpened after recent disruptions in the Middle East. OilPrice reported that Indian refiners were forced to look for alternatives when tensions in the region unsettled shipping and supply, while state-owned Oil and Natural Gas Corporation plans a new storage site at Mangaluru capable of holding about 13 million barrels. The same report said India’s current maximum reserve capacity covers only about 8 days of national demand, a thin buffer for the world’s third-largest crude importer.
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