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Subject: Energy Security

  • Iran war pushes India’s oil & gas import bill up 43%

    Why in the News

    India’s net oil and gas imports rose 43.4 percent in value in April to July of the current financial year, to $57.8 billion from $40.3 billion a year earlier. Import volumes barely moved, so the increase is almost entirely a price effect created by supply tightness and stifled energy flows through the Strait of Hormuz. With 88.3 percent of crude requirement met by imports, India has prioritised supply security over price, and the cost of that choice lands on the trade balance.

    What are net oil and gas imports?

    1. How the figure is built: Net oil and gas imports are arrived at by deducting petroleum product exports from oil, natural gas and petroleum product imports.
    2. Why the deduction matters: India is a net exporter of petroleum products because of its refining capacity, so gross import figures overstate the true external drain.
    3. What it still includes: India also imports some petroleum products, notably liquefied petroleum gas, so the netting does not remove product imports entirely.
    4. Why it is the tracked number: It measures the actual foreign exchange outgo on energy, which is what feeds into the trade balance and the current account.

    What is the Petroleum Planning and Analysis Cell?

    1. What it is: The Petroleum Planning and Analysis Cell (PPAC) is the data and analysis body under the Ministry of Petroleum and Natural Gas. It compiles India’s official import, consumption, production and pricing statistics for petroleum and natural gas.

    What is liquefied natural gas?

    1. What it is: Liquefied natural gas (LNG) is natural gas, primarily methane, cooled to minus 162 degrees C so that it becomes liquid and can be shipped in cryogenic carriers. It must be regasified at a terminal in the importing country before use.
    2. How it is priced: Spot LNG in Asia is priced against the Japan Korea Marker, with Henry Hub and the Title Transfer Facility serving the American and European markets.

    What is liquefied petroleum gas?

    1. What it is: Liquefied petroleum gas (LPG) is propane and butane, produced as a byproduct of oil refining or natural gas processing, and used for domestic cooking, industrial heating and autogas.
    2. How it is priced: It is priced against the Saudi Aramco Contract Price, which is loosely linked to Brent crude.

    Why did the import bill rise 43 percent when volumes barely moved?

    1. Volumes were nearly flat: Oil and LNG imports were only marginally higher in volume terms across April to July.
    2. Crude price did the work: The average landed price of imported crude was about $106 per barrel in April to July, sharply higher than about $68 per barrel in the corresponding period of last year.
    3. Value rose without volume: The crude oil import bill surged by over 56 percent year on year to $63.4 billion even as volumes rose only slightly, to 81.9 million tonnes or about 600 million barrels, from 81.5 million tonnes.
    4. The stated priority: India has been prioritising supply security over price considerations, so it imported at extremely high rates rather than curtail volumes.
    5. Product trade moved the same way: Petroleum product export volumes fell while export value rose, and product import volumes fell faster than product import value, both reflecting high international prices.

    How did each component of the energy trade basket move?

    1. Crude oil imports, volume: 81.9 million tonnes against 81.5 million tonnes a year earlier, a rise of 0.5 percent.
    2. Crude oil imports, value: $63.4 billion against $40.5 billion, a rise of 56.5 percent.
    3. Petroleum product imports, volume: 9.0 million tonnes against 16.4 million tonnes, a fall of 45.1 percent.
    4. Petroleum product imports, value: $5.6 billion against $7.6 billion, a fall of 26.3 percent.
    5. LNG imports, volume: 11,867 million standard cubic metres against 11,269 million standard cubic metres, a rise of 5.3 percent.
    6. LNG imports, value: $5.6 billion against $4.5 billion, a rise of 24.4 percent.
    7. Petroleum product exports, volume: 16.5 million tonnes against 20.1 million tonnes, a fall of 17.9 percent.
    8. Petroleum product exports, value: $16.7 billion against $12.4 billion, a rise of 34.7 percent.
    9. Net oil and gas imports: $57.8 billion against $40.3 billion, a rise of 43.4 percent.

    How exposed is India’s energy basket to the Strait of Hormuz?

    1. Crude dependence: India depends on imports to meet over 88 percent of its crude oil requirement, and its dependence on imported oil for the four months ended July was 88.3 percent, almost flat year on year.
    2. Gas dependence: About half of India’s natural gas consumption is met by imports, brought in as LNG.
    3. Share routed through the strait: Around 40 percent of India’s crude oil imports, 60 percent of its LNG imports and 90 percent of its LPG imports came from West Asia through the strait.
    4. Where the disruption showed: Petroleum product imports declined 45.1 percent in volume to 9.0 million tonnes because supply of major products India imports, such as LPG, was hit by the West Asia conflict.
    5. Why exports fell: India’s petroleum product export volumes fell almost 18 percent year on year to 16.5 million tonnes as domestic fuel supplies were prioritised amid the global supply crunch.

    Why does an oil price shock transmit into the wider economy?

    1. The volume multiplier: India annually imports 1.8 to 2 billion barrels of oil, so every $1 per barrel increase raises the oil import bill by up to $2 billion on an annualised basis.
    2. Share of total imports: Energy imports are a major component of India’s overall imports, so any meaningful increase moves the aggregate import number.
    3. Trade balance and current account: A higher energy bill widens the merchandise trade deficit and feeds directly into the current account deficit.
    4. Inflation channel: Higher landed crude costs pass into transport and freight costs and into the prices of petroleum linked goods.
    5. Exchange rate channel: A larger dollar outgo on energy adds to demand for foreign exchange and weighs on the rupee’s exchange rate.

    Challenges to managing India’s oil and gas import bill

    1. Demand is price inelastic in the short run: Refiners cannot cut crude intake without cutting fuel supply, so a price shock passes straight into the bill. Eg. Crude import volumes rose 0.5 percent even as the crude bill rose 56.5 percent in April to July.
    2. Concentration of LPG sourcing: A single region supplies almost the entire LPG import basket, leaving no substitute route in a disruption. Eg. The West Asian share of India’s LPG imports moves entirely through the Strait of Hormuz, with no second corridor available if the strait closes.
    3. Fixed rupee excise blocks pass through of relief: Central excise duty is levied as a fixed amount per litre rather than as a percentage, so falling crude prices accrue to revenue rather than to consumers. Eg. When Brent fell from $80 to $60 per barrel in early 2025, Delhi petrol fell by only about Rs 2 to 3 per litre.
    4. Strategic reserve cover below international norms: The buffer available to ride out a supply interruption is short of the accepted benchmark. Eg. India’s total crude cover of 74 days sits below the International Energy Agency norm of 90 days of net import cover.
    5. No strategic reserve for gas at all: The gas basket has an operational buffer but no strategic cushion. Eg. India’s LNG storage tanks at regasification terminals give roughly 10 days of operational buffer, with no strategic LNG reserve in existence.
    6. Spot LNG volatility deters utilisation: When spot prices spike, importers switch to coal or fuel oil, stranding regasification capacity. Eg. India’s roughly 42.5 million tonnes per annum of LNG regasification capacity runs at 60 to 65 percent utilisation because switching becomes rational above $15 per MMBtu.
    7. Refinery configuration ties India to sour crude sources: Indian refineries have invested in desulphurisation capacity built around Middle Eastern grades, which limits how fast the basket can be re-sourced. Eg. Most Middle Eastern crude India buys is priced against Dubai and Oman, and Saudi, Iraqi and UAE grades track that benchmark.

    Conclusion

    India’s net oil and gas import bill rose to $57.8 billion in April to July from $40.3 billion a year earlier, a 43.4 percent increase driven almost wholly by price rather than volume. At 88.3 percent crude import dependence and with the West Asian shares of crude, LNG and LPG all routed through the Strait of Hormuz, a chokepoint disruption converts directly into a macroeconomic shock. The figures are provisional data from the Petroleum Planning and Analysis Cell, and the next reading will show whether the price effect persists once Hormuz flows normalise.

    About India’s Crude Oil Procurement and Pricing

    1. Who buys: State owned refiners account for 73 percent of India’s procurement through Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited, with private refiners Reliance Industries and Nayara Energy accounting for 27 percent.
    2. How buying works: Each refiner independently forecasts demand two to three months ahead and negotiates bilaterally with suppliers such as Rosneft, Saudi Aramco and Iraq’s State Organisation for Marketing of Oil.
    3. How it is priced: All contracts are priced as Brent plus or minus a negotiated discount, and Middle Eastern grades track the Dubai and Oman benchmark.
    4. Where crude lands: Crude is received by tanker at Paradip, Mumbai, Kochi and Vadinar.
    5. Quality determines price: Sulphur content and American Petroleum Institute (API) gravity, the measure of a crude’s density, together determine refining cost and product yield, with sweet crude defined as sulphur content below 0.5 percent and sour crude requiring additional processing.

    Regulatory Framework Governing India’s Petroleum and Natural Gas Sector

    1. Ministry of Petroleum and Natural Gas: The apex policy body, which sets the framework for exploration, refining, marketing, pricing and strategic reserves, awards production sharing contracts, and exercises ownership over the public sector oil companies.
    2. Petroleum and Natural Gas Regulatory Board: Regulates refining, processing, storage, transportation, distribution, marketing and sale of petroleum products and natural gas, authorises City Gas Distribution networks, and determines pipeline tariffs on a common carrier basis.
    3. Directorate General of Hydrocarbons: The technical regulator for upstream exploration and production, which manages block allocations, monitors production sharing contracts, verifies reserves, approves field development plans and maintains the National Data Repository.
    4. Oil Industry Development Board: Funded by a statutory cess on domestic crude production, it finances oil industry development and wholly owns Indian Strategic Petroleum Reserves Limited, which operates the underground reserve caverns.
    5. Deregulated retail pricing: Petrol was deregulated in 2010 and diesel in 2014, so the Ministry does not directly set retail pump prices.

    Government Initiatives in the Petroleum and Gas Sector

    1. Strategic Petroleum Reserve: Phase I comprises 5.33 million tonnes of crude across three underground rock caverns at Visakhapatnam, Mangaluru and Padur, with a Phase II commercial cum strategic expansion under public private partnership models.
    2. Hydrocarbon Exploration and Licensing Policy, 2016: Replaced the earlier New Exploration Licensing Policy with a uniform licence covering all hydrocarbons, open acreage licensing and revenue sharing in place of production sharing.
    3. Administered Price Mechanism for domestic gas: The Ministry sets the administered price for domestic natural gas indexed monthly at 10 percent of the Indian Crude Basket price, following the Kirit Parikh Committee recommendations, subject to a floor and ceiling for legacy fields.
    4. Direct Benefit Transfer for LPG: LPG is subsidised through direct transfer, with Rs 300 per cylinder for Ujjwala beneficiaries.
    5. City Gas Distribution expansion: India’s city gas distribution network now covers 98 cities, supplying compressed natural gas for vehicles and piped natural gas for households from a mix of domestic gas and regasified LNG.

    Key Facts about Global Oil Benchmarks and India’s Reserves

    1. Brent crude: North Sea origin, 38 API and 0.37 percent sulphur, traded on the Intercontinental Exchange in London, accounting for 75 to 80 percent of global oil trade and serving as the reference against which all other grades are a premium or discount.
    2. West Texas Intermediate: Cushing, Oklahoma origin, 39.6 API and 0.24 percent sulphur, traded on the New York Mercantile Exchange, accounting for 15 to 20 percent of global trade and typically Brent minus $0 to $5 per barrel.
    3. Dubai and Oman: Persian Gulf origin, 31 to 33 API and 1.0 to 2.0 percent sulphur, traded on the Dubai Mercantile Exchange, accounting for 5 to 10 percent of global trade and typically Brent minus $5 to $15 per barrel.
    4. Why OPEC does not set the price: OPEC controls 40 percent of production but Brent sets 75 to 80 percent of global prices, since markets price oil hundreds of thousands of times a day while OPEC announces targets once and has no enforcement mechanism against quota cheating.
    5. Reserve position: India’s total crude cover is 74 days, made up of 9.5 days from the Strategic Petroleum Reserve and 64.5 days of oil marketing company commercial stocks, against the International Energy Agency norm of 90 days.
    6. LPG and LNG cover: LPG cavern capacity of about 140,000 tonnes gives roughly 22 days of cover against consumption of about 3 million tonnes a month, while LNG has about 10 days of operational buffer and no strategic reserve.
    7. Volatility of spot gas: The Japan Korea Marker swung from $3 per MMBtu in mid 2020 to $70 per MMBtu in August 2022.
    8. Committee recommendation on storage: The Parliamentary Standing Committee on Petroleum in December 2023 recommended equipping refineries with two to three days of smaller strategic storage at five to six additional locations, which could add 15 to 20 days of capacity.

    Back2Basics: Strait of Hormuz

    1. Location: A narrow sea passage connecting the Persian Gulf to the Gulf of Oman and onward to the Arabian Sea.
    2. Control: Iran controls the northern shore and seven of the eight islands in the strait, Oman controls the southern entrance, and the United States Fifth Fleet acts as the external guarantor of transit.
    3. Oil traffic: About 20 million barrels a day pass through it, amounting to 20 percent of global oil movement.
    4. Gas traffic: It carries 20 percent of global LNG trade, which makes closure hit gas hardest given Qatar’s dominance in LNG supply.
    5. Strategic character: It carries the highest concentration of energy flow of any maritime chokepoint in the world.

    Challenges in India’s Energy Security

    1. Stagnant domestic crude production: Falling domestic output pushes import dependence upward regardless of demand. Eg. Cess collections of the Oil Industry Development Board have declined in real terms because domestic crude production has stagnated.
    2. Regulatory conflict of interest: The same ministry sets the pricing environment and owns the companies whose losses that environment creates. Eg. The Ministry of Petroleum and Natural Gas simultaneously regulates the sector and holds ownership rights over Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.
    3. Gaps in the regulatory perimeter: No single regulator covers the full chain from wellhead to pump. Eg. The Petroleum and Natural Gas Regulatory Board has no jurisdiction over upstream exploration, wellhead gas pricing or LPG retail pricing.
    4. Upstream reservoir disputes slow output: Technical disputes between operators delay field development and carry royalty implications. Eg. The gas migration dispute between ONGC and Reliance Industries in the Krishna Godavari basin required adjudication by the Directorate General of Hydrocarbons.
    5. Chokepoint concentration across all three fuels: Crude, LPG and LNG share the same maritime chokepoint, so diversification of supplier does not diversify route. Eg. LPG moves with crude tankers or on dedicated carriers through the same Strait of Hormuz.
    6. Tax structure blunts price signals: Taxes form roughly 60 percent of the retail pump price, weakening the link between global prices and consumer behaviour. Eg. Delhi petrol at Rs 96 to 97 per litre carried Rs 13 of central excise and Rs 15 to 18 of State value added tax before the crisis.
    7. Storage build out lags the exposure: Reserve expansion depends on capital and cavern geology, both of which take years. Eg. Phase II of the Strategic Petroleum Reserve is being pursued through public private partnership because budgetary funding alone has not delivered the capacity.

    Way Forward

    1. Complete Phase II of the Strategic Petroleum Reserve: Bring the commercial cum strategic caverns on stream to move total cover towards the 90 day International Energy Agency norm.
    2. Adopt the refinery level storage recommendation: Implement the Parliamentary Standing Committee’s December 2023 proposal on refinery level storage, which remains a recommendation rather than sanctioned capacity.
    3. Create a strategic gas reserve: Extend the reserve architecture to LNG, which today has only an operational buffer at regasification terminals.
    4. Shift excise from a fixed levy to an ad valorem levy: This would let consumers receive part of the benefit when crude prices fall, restoring the price signal.
    5. Diversify sourcing away from a single chokepoint: Expand term contracts with Atlantic basin, West African and North American suppliers so that a Hormuz disruption does not strike crude, LNG and LPG supply simultaneously.
    6. Raise domestic production through open acreage: Accelerate block awards under the Hydrocarbon Exploration and Licensing Policy to arrest the decline in domestic output.
    7. Separate ownership from regulation: Move ownership of the public sector oil companies out of the administering ministry so that pricing policy is not set by their shareholder.

    “[2025, GS2, 15] “Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.” How would you integrate energy security with India’s foreign policy trajectories in the coming years?”

  • [19th August 2026] The Hindu OpED: Beyond America: Gulf states must build a regional order past the US security umbrella

    Question (2022, GS2): “How will I2U2 (India, Israel, UAE and USA) grouping transform India’s position in global politics?” 
    Linkage: This question explores how India integrates into new regional frameworks that include Gulf states (UAE) and Israel, illustrating the evolving security and economic partnerships in West Asia.

    Mentor Comment

    The United States President has threatened, for the second time, to bomb Oman, a long standing American ally that hosted talks between Washington and Tehran before the war was launched on 28 February. The threat against an ally exposes a conflict between an American security architecture built on bases across the Persian Gulf and a war in which those bases have become the principal liability of the states that host them.

    What is the American security umbrella in the Persian Gulf?

    1. What it is: The American security umbrella is the arrangement under which the United States guarantees the external security of the Persian Gulf monarchies through forward deployed forces, basing agreements and arms sales, in exchange for regional access and stable energy flows.
    2. Physical form: Over the years the United States built military bases across the Persian Gulf, hosting naval, air and command elements on the territory of partner states.
    3. Strategic premise: The arrangement rested on the assumption that an American presence deters Iran and that hosting American forces raises rather than lowers a host state’s security.
    4. Companion policy: It was paired with a decades old policy of containing Iran through sanctions, isolation and force posture.
    5. What the war has done to it: The foundations of this security architecture have been shaken, since American bases have turned out to be a liability in the hour of need.

    What is the Strait of Hormuz?

    1. What it is: The Strait of Hormuz is the narrow waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea, bordered by Iran to the north and Oman and the United Arab Emirates to the south.
    2. Why it matters: One fifth of the world’s seaborne oil passed through the Strait before the war, which makes its closure a global energy event rather than a regional one.

    What is the Fifth Fleet?

    1. What it is: The United States Fifth Fleet is the naval formation responsible for the Persian Gulf, the Red Sea, the Arabian Sea and parts of the Indian Ocean, headquartered in Bahrain.
    2. Why its damage matters: Its headquarters is the command node of the American naval presence in the region, so damage to it is a loss of command capacity and not only of infrastructure.

    What is a cold peace?

    1. What it is: A cold peace is a settlement in which former adversaries stop fighting and maintain functional diplomatic and economic contact without reconciling their underlying political differences or building trust.
    2. Why it is proposed here: It is the achievable objective between the Arab states and Iran, since containment has failed and full normalisation is not available.

    What triggered the threat against Oman?

    1. Oman’s original role: Oman hosted the talks between Washington and Tehran before the war was launched on 28 February, making it the diplomatic venue rather than a party to the conflict.
    2. Oman’s continuing role: Since the failed escalation, Oman, under American influence, has been talking to Iran seeking a settlement.
    3. Why the effort stalled: Iran, having survived two rounds of American bombings, refused to offer major concessions.
    4. The consequence for Oman: American frustration deepened with Oman precisely because Muscat could not deliver an Iranian concession it never had the power to extract.
    5. The nature of the threat: This is the second time the American leader has threatened to attack Oman, and the threat now falls on an ally for failing to produce a face saving deal.
    6. What the threat reveals: Instead of reassuring allies whose territory has been struck, Washington is threatening them, which is the clearest signal of declining influence in the region.

    Why has the Strait of Hormuz not reopened?

    1. Who closed it: Iran closed the Strait after it was attacked, making closure a retaliatory instrument rather than a negotiating opening position.
    2. The claimed breakthrough: When the American leader backed down from a threatened escalation after 13 days of bombing on Iran in July, he said the two sides were close to a deal on reopening the Strait.
    3. Iran’s position: Iran never said that it had agreed to any deal with the United States over the Strait.
    4. Iran’s stated preconditions: Iran issued several demands as preconditions for any agreement, including releasing frozen funds and issuing sanctions relief.
    5. The claim against the traffic data: The American President has repeatedly claimed the Strait was open, while traffic through the waterway is nowhere near pre war levels.
    6. Scale of what is blocked: The waterway carried one fifth of the world’s seaborne oil before the war, so the gap between claimed and actual traffic is a measurable global supply loss.

    What has the war done to America’s regional military position?

    1. Bases damaged or destroyed: At least 15 American bases are either damaged or destroyed.
    2. The command node hit: The damaged facilities include the Fifth Fleet Headquarters in Bahrain.
    3. Net effect on presence: The damage has substantially reduced America’s strategic presence in the region.
    4. How Iran achieved it: Tehran turned the American basing network into a liability by repeatedly striking the bases and their host countries.
    5. Iran’s own survival: Iran survived two rounds of American bombings and remained able to refuse major concessions afterwards.
    6. Failure of coercive signalling: From day one of the war, American threats and rhetoric did little to advance Washington’s strategic goals or to deter Iran.

    Why has the presence meant to protect Gulf states become the source of their danger?

    1. Both propositions held simultaneously: The bases were the guarantee of Gulf security and the reason Gulf territory was struck, and the war has resolved that ambiguity against the hosts.
    2. Iran’s targeting logic: By striking the bases and the host countries together, Tehran converted the guarantee into a cost borne by the host rather than by the guarantor.
    3. The guarantor’s response: Washington neither restored deterrence nor reassured the hosts, and has instead threatened one of them with bombing.
    4. The asymmetry of exposure: The host state’s territory, population and economy absorb the retaliation while the guarantor’s homeland does not.
    5. Why the old bargain cannot simply be repaired: Reassurance would require a demonstrated capacity to deter Iranian strikes, which two rounds of bombing failed to establish.
    6. The unresolved dependence: Gulf states have no alternative security provider of comparable capability, so recognising the failure of the arrangement does not by itself produce a substitute.

    Why has the containment of Iran failed?

    1. The record of the war: Iran absorbed two rounds of American bombing and emerged able to hold the Strait closed and to set preconditions for talks.
    2. Coercion produced no concession: Threats and rhetoric from the first day of the war neither advanced American goals nor deterred Iranian action.
    3. The cost fell on third parties: Containment’s enforcement damaged the host states of American bases rather than the target of the policy.
    4. Diplomacy was subordinated to pressure: Oman’s mediation was conducted under American influence rather than as an independent regional initiative, which limited what it could offer Tehran.
    5. The policy’s own premise collapsed: A decades old policy of isolating Iran cannot be sustained when the isolating power’s regional presence has been substantially reduced.

    What would a new regional order require?

    1. Recognition of the strategic reality: Countries in the region confront a new strategic reality in which the foundations of the old security architecture have been shaken.
    2. Abandoning containment: Gulf states must recognise that the decades old policy of containing Iran has failed.
    3. Looking past the umbrella: To ensure their own security and regional stability, the Persian Gulf countries need to look beyond the American security umbrella.
    4. The organising principle: The new order must be founded on a cold peace between the Arab states and Iran, not on reconciliation or on alliance.
    5. Regional rather than external authorship: The foundations have to be laid by the regional states themselves, since the external guarantor has demonstrated both limited capability and limited commitment.

    How does the Gulf’s shifting security order affect India’s interests?

    1. Energy dependence: India imports over 85 percent of its crude oil, and a large share of West Asian supply transits the Strait of Hormuz, so a closed Strait raises both price and freight and insurance costs.
    2. Diaspora exposure: About 90 lakh Indians live and work in the Gulf Cooperation Council states, the largest concentration of Indians anywhere outside India.
    3. Remittance dependence: The Gulf accounts for a substantial share of India’s annual remittance inflows, which exceeded $125 billion in recent years and are the country’s most stable external receipt.
    4. Trade and connectivity stakes: The India Middle East Europe Economic Corridor and India’s trade agreement with the United Arab Emirates both assume a stable and navigable Gulf.
    5. Balancing act with Iran: India’s Chabahar port investment and its connectivity route to Central Asia through Iran sit alongside its deepening partnerships with the Gulf monarchies and Israel.
    6. Strategic preference: A cold peace between the Arab states and Iran serves India better than either containment or open conflict, since India maintains working relationships across all three blocs.

    Challenges to building a new Persian Gulf regional order

    1. Absence of a regional security institution: The Gulf has no inclusive security organisation covering both the Arab states and Iran, e.g. the Gulf Cooperation Council formed in 1981 explicitly excludes Iran and Iraq.
    2. Sectarian and dynastic rivalry: Competition between Riyadh and Tehran runs through proxy conflicts that outlast any bilateral thaw, e.g. the Yemen conflict continued despite the Saudi Iran normalisation agreement brokered in Beijing in March 2023.
    3. Capability dependence on external suppliers: Gulf militaries are built on American platforms, training and sustainment, so autonomy is limited by the equipment they already own, e.g. Patriot and THAAD air defence systems in Saudi Arabia and the United Arab Emirates depend on American logistics chains.
    4. Intra Gulf divergence: The Gulf Cooperation Council states do not share a single position toward Iran, e.g. the blockade of Qatar between 2017 and 2021 was driven partly by differing approaches to Tehran.
    5. Nuclear file unresolved: No verification framework governs Iran’s nuclear programme after the collapse of the earlier agreement, e.g. the Joint Comprehensive Plan of Action of 2015 ceased to constrain enrichment after the American withdrawal in 2018.
    6. Energy chokepoint vulnerability: Any settlement leaves the Strait of Hormuz physically controllable by one party, e.g. one fifth of the world’s seaborne oil transited the Strait before Iran closed it.
    7. External power competition: China and Russia have expanding interests in the region and no shared framework with the United States, e.g. China brokered the Saudi Iran agreement of 2023 without American involvement.
    8. Domestic legitimacy constraints: Gulf rulers face internal opposition to accommodation with Iran and to visible dependence on foreign forces, e.g. Bahrain’s own political fault lines were exposed during the unrest of 2011.

    Conclusion

    The war has produced a result the Gulf states cannot reverse: at least 15 American bases damaged or destroyed including the Fifth Fleet Headquarters in Bahrain, the Strait of Hormuz still functionally closed, and an American guarantor now threatening an ally rather than reassuring it. The decades old policy of containing Iran has failed, and no external power is positioned to replace the security architecture that failure has hollowed out. What remains unresolved is whether the Persian Gulf states can construct a regional order on a cold peace with Iran while their own militaries, economies and rivalries still run through the arrangement they must replace.

  • [17th August 2026] The Hindu OpED: Mecca Pact Reshapes West Asia: Where Does India Stand?

    Why in the News

    A collective defence pact signed in Mecca between Saudi Arabia, Turkiye and Pakistan has altered the security architecture of West Asia. The pact pools Saudi capital, Pakistani military strength and Turkish defence technology, and is aimed at deterring Israel rather than Iran. India built a decade of gains in the region and now has no declared strategy to answer this realignment.

    What did India build in West Asia over the past decade?

    1. 2016, Saudi recognition: Saudi Arabia awarded India’s Prime Minister its highest civilian honour, marking a shift in the political relationship.
    2. 2021, I2U2: The I2U2 agreement was signed, tying India into a grouping with Israel, the United States and the UAE.
    3. 2024, Chabahar: Iran leased Chabahar port to India, giving overland access towards Afghanistan and Central Asia that bypasses Pakistan.
    4. The UAE relationship: India cultivated a special relationship with the UAE built on remittances from Indian expatriate workers, investments by Indian business in the UAE, and UAE strategic investments in India.
    5. Where they stand now: These are gains from the past, and India’s footprint is contracting one country at a time.

    Why is the region’s security order breaking down now?

    1. A war that spread: In the last four months the United States and Israel war with Iran escalated into a regional conflict.
    2. Iran against the Gulf: Iran attacked GCC countries, ending the assumption that the Gulf monarchies sit outside the fighting.
    3. Saudi strikes in Iraq: Saudi Arabia hit Iraqi militias.
    4. Attacks at sea: The Houthis attacked Saudi ships.
    5. Israeli strikes: Israel carried out strikes in multiple countries.
    6. The American umbrella in doubt: Gulf states are rethinking the efficacy of the United States security umbrella and now see a threat from both Iran and Israel.
    7. A schism over method: The Gulf is split between handling that threat through engagement, the UAE approach, and through deterrence, which Saudi Arabia is contemplating.

    How has Pakistan converted the regional crisis into diplomatic capital?

    1. The mediator role: Pakistan’s role as mediator in the United States and Iran conflict is earning it reputational benefits across the region.
    2. The timing: It entered when no one else could bring the United States President and the Iranians to the table.
    3. Who had failed first: Turkiye, Qatar and Egypt had all attempted mediation without success.
    4. The pact as the payoff: The Mecca collective defence pact follows directly from that diplomatic moment.
    5. The Israel risk for India: A future Israel and Pakistan war would draw India in, given the close India Israel partnership.
    6. The Turkiye risk for India: Greater Turkish support for Pakistan in a future India Pakistan conflict cannot be ruled out.

    What do the positions of individual regional states reveal about the new architecture?

    1. Saudi Arabia, deterrence and a new maritime force: Riyadh is moving from engagement to deterrence, supplies the capital leg of the Mecca pact, and is raising a Saudi led maritime force for the Red Sea that India is not part of.
    2. Turkiye, technology as leverage: Ankara contributes defence technology to the pact and runs a deepening military relationship with Pakistan that India has no channel to discuss.
    3. Pakistan, military manpower as currency: Islamabad supplies the military strength the pact rests on, converting an army into diplomatic capital with Gulf financiers.
    4. United Arab Emirates, engagement over deterrence: Abu Dhabi manages the Iran and Israel threat through engagement, and carries mounting differences with Saudi Arabia plus positions against United Nations recognised governments in conflicts as far away as Sudan.
    5. Iran, from partner to belligerent: Tehran leased Chabahar to India in 2024 and has since attacked GCC states, putting India’s connectivity asset inside an active war zone.
    6. Israel, strikes that created the pact: Israeli operations across multiple countries made three regional states conclude they are next, which is the design logic of the Mecca pact.

    Why does India’s current posture carry risk?

    1. The Israel bet: India’s approach rests on confidence in Israel’s victory, drawn from Israel’s proximity to the United States.
    2. The American consensus is shifting: Both Make America Great Again Republicans and Democratic Socialists now question the once unquestioned United States support for Israel.
    3. Israel alone: Whether Israel can prevail without assured American backing is unsettled.
    4. The UAE bet: The second pillar of India’s regional position is the UAE relationship, resting on remittances, elite investment and Emirati investment in India.
    5. UAE exposure: The UAE’s differences with Saudi Arabia and its Sudan positions place that pillar at risk.

    What are the choices before India?

    1. Formal alignment: India can sign military alliances with Israel and the UAE.
    2. The cost of alignment: That would damage what is left of India’s relationships with Iran and Saudi Arabia.
    3. Continued inaction: India can do nothing, which is the current position.
    4. Cost of inaction, seafarers: Indian merchant mariners continue to be killed in the Strait of Hormuz.
    5. Cost of inaction, shipping: More Indian ships sink in the Bab-el-Mandeb.
    6. Reputational cost: A great power in the making appears hobbled in its own immediate maritime neighbourhood.
    7. The third way: India can devise an active regional political strategy instead of choosing between alignment and drift.

    What would an active Indian regional strategy involve?

    1. Renewed engagement with Saudi Arabia: India has no explicit differences with Riyadh, which makes it the cheapest relationship to rebuild.
    2. Arab and Iran trust building: India can work to rebuild trust between Arab states and Iran, beginning with the UAE and Iran relationship.
    3. Jordan’s security: India can offer defensive technologies to Jordan at a time when United States munitions are running low.
    4. Lebanon peacekeeping: India can take a role in the future UN peacekeeping presence in Lebanon, with UNIFIL forecast to end.
    5. A back channel with Turkiye: India can share its red lines on Turkiye’s relationship with Pakistan through a quiet channel.
    6. Red Sea shipping with Egypt: If India cannot join the Saudi led maritime force, it can work with Egypt on a parallel effort to protect India bound shipping from the Suez Canal to Bab-el-Mandeb.
    7. A military presence: India can examine a presence in the Red Sea region, in Somaliland or Socotra.
    8. Exercises with the region: Existing military training exchanges can be scaled into joint drills and exercises with a range of regional states.
    9. A Special Envoy for West Asia: India can appoint one who draws all the threads together, rather than one confined to the Israel and Palestine peace process.

    Challenges to India’s West Asia Strategy

    1. The alliance trap: Any formal military alignment with one camp forecloses the other, since Iran and Saudi Arabia both read Indian alignment as a choice against them. e.g. India’s Chabahar development slowed each time United States sanctions pressure on Iran tightened.
    2. The Turkiye and Pakistan axis: Turkish defence technology transfers to Pakistan directly degrade India’s conventional edge. e.g. Turkish origin Songar armed drones were used against Indian positions during the May 2025 hostilities.
    3. Chokepoint exposure: India’s trade and energy routes converge on two narrow straits it cannot secure alone. e.g. Houthi attacks from late 2023 forced Indian bound shipping to reroute around the Cape of Good Hope, raising freight and insurance costs.
    4. Attacks on Indian crewed shipping: Indian seafarers crew a large share of global merchant vessels and absorb the human cost of regional escalation. e.g. the drone strike on MV Chem Pluto off Porbandar in December 2023.
    5. Evacuation burden: Every escalation converts India’s diaspora presence into a mass evacuation operation. e.g. Operation Kaveri from Sudan in 2023 and Operation Sindhu from Iran and Israel in June 2025.
    6. No standing regional mechanism: India has no dedicated envoy or regional platform to convert bilateral goodwill into collective influence. e.g. the piece’s own recommendation for a Special Envoy for West Asia has no existing counterpart in the Indian system.
    7. Exclusion from new regional security structures: New arrangements are being built without Indian participation. e.g. the Saudi led Red Sea maritime force, which India is not part of.

    Conclusion

    West Asia’s security architecture is being rebuilt around a Saudi Arabia, Turkiye and Pakistan pact designed to deter Israel, and India has no strategy that matches the scale of that change. Formal alignment with Israel and the UAE costs India Iran and Saudi Arabia, and inaction costs it seafarers, ships and standing. The workable route is an active regional political strategy built on renewed engagement with Riyadh, trust building between the Arab states and Iran, and a dedicated envoy. India’s capacity to shape the region survives, its window does not.

    West Asia in India’s Foreign Policy

    1. About: West Asia covers the Gulf monarchies, Iran, Iraq, Israel, Turkiye and the Levant, treated in Indian policy as an extended neighbourhood rather than a distant theatre.
    2. Policy label: India’s approach shifted from Look West to Link West, moving beyond oil and labour transactions towards defence, technology and investment partnerships.
    3. Energy: West Asia remains a principal source of India’s crude oil imports, and Qatar is India’s largest supplier of liquefied natural gas.
    4. Diaspora: About 9 million Indians live and work in the Gulf, the largest concentration of the Indian diaspora anywhere.
    5. Remittances: India is the world’s largest recipient of remittances, receiving over 100 billion dollars annually, with the Gulf a major contributor.
    6. Trade: The UAE is among India’s top three trading partners, and the India UAE Comprehensive Economic Partnership Agreement took effect in May 2022.
    7. Connectivity: The India Middle East Europe Economic Corridor (IMEC) was announced on the margins of the G20 New Delhi Summit in September 2023.

    Back2Basics: Gulf Cooperation Council

    1. Formation: Established in 1981 at Abu Dhabi.
    2. Headquarters: Riyadh, Saudi Arabia.
    3. Members: Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman.
    4. Mandate: Coordination and integration among members in economic, defence, security and cultural affairs.
    5. Military arm: The Peninsula Shield Force, a joint military force raised in 1984.
    6. Economic instrument: A unified economic agreement and a customs union among the six members.
    7. India link: India is not a member, and engages the bloc through bilateral strategic partnerships and an India GCC ministerial mechanism.

    Government Initiatives for India’s West Asia Engagement

    1. Link West Policy: Reframes the Gulf and West Asia as a zone of strategic partnership rather than an energy and labour market alone.
    2. I2U2: Joint investment platform with Israel, the United States and the UAE across food security, clean energy and health.
    3. India Middle East Europe Economic Corridor: Rail and shipping corridor linking India to Europe through the Gulf, announced in September 2023.
    4. India UAE Comprehensive Economic Partnership Agreement, 2022: India’s first Gulf trade agreement, cutting tariffs on the bulk of traded goods.
    5. Chabahar long term contract, 2024: A ten year agreement for operating the Shahid Beheshti terminal, giving India a port outside the Strait of Hormuz.
    6. eMigrate portal and Pravasi Bharatiya Bima Yojana: Registration and mandatory insurance cover for Indian workers emigrating to Gulf destinations.
    7. Evacuation operations: Operation Sindhu, Operation Ajay and Operation Kaveri, evacuating Indians from Iran and Israel, Israel and Sudan respectively.
    8. Operation Sankalp: Indian Navy deployment in the Gulf of Oman and the Persian Gulf to escort Indian flagged merchant shipping.

    Key Facts about India and West Asia

    1. The Strait of Hormuz carries roughly a fifth of global oil consumption and has no practical bypass for most Gulf exporters.
    2. The Bab-el-Mandeb is the southern gate of the Red Sea and the compulsory approach to the Suez Canal.
    3. Chabahar is Iran’s only oceanic port, on the Gulf of Oman, and lies outside the Strait of Hormuz.
    4. India’s overseas military logistics access includes Duqm in Oman, agreed in 2018.
    5. I2U2 was agreed in 2021 and held its first leaders summit in July 2022.
    6. India is not a member of the Organisation of Islamic Cooperation, and was invited as guest of honour to its foreign ministers meeting at Abu Dhabi in 2019.
    7. The GCC has six members; the wider Arab League has 22.

    “[2025, GS2, 15 marks] “Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.” How would you integrate energy security with India’s foreign policy trajectories in the coming years?”

  • India’s rising dependence on U.S. LPG

    Why in the news?

    The Union Minister of Petroleum and Natural Gas stated that 67 per cent of India’s liquefied petroleum gas (LPG) now comes from the United States, a drastic shift from an earlier decision to source about 10 per cent of cooking gas there. The pivot, driven by the crisis in the Strait of Hormuz, exposes that LPG security cannot be anchored to a single geography while dependence on the United States carries risks of its own.

    What is Liquefied Petroleum Gas (LPG) and how is India’s supply structured?

    1. What it is: LPG is a mix of propane and butane used mainly as cooking gas in India. It is a politically volatile fuel because shortages carry direct social and political consequences.
    2. Import dependence: India, the world’s second largest importer of LPG, imports about 60 per cent of the LPG it consumes, with nearly 90 per cent of that passing through the Strait of Hormuz.
    3. Sourcing shift: State run refiners signed a long term deal for 2.2 million tonnes of United States LPG in 2026, raising the United States share to two thirds of imports.

    Why did India pivot to United States LPG?

    1. Hormuz disruption: Disruptions in the narrow Strait of Hormuz threatened the Gulf supply route through which most Indian LPG passes.
    2. Collapse in West Asian flows: India’s LPG imports from West Asia fell almost 85 per cent between February and June 2026.
    3. Partial offset: India replaced the lost flows by lifting imports from other sources, including the United States, from where June imports reached 0.77 million metric tonnes.
    4. Availability over price: Because cooking gas is politically sensitive, the priority is making it available rather than optimising cost, so costlier United States cargoes became attractive during the crisis.

    Why is overdependence on the United States risky?

    1. Energy as leverage: Relying more on a partner that views ties through the lens of national interest risks energy being used as a bargaining tool in bilateral trade talks.
    2. History of coercive tools: The United States has historically used financial sanctions, export controls, and technology denial as foreign policy tools, seen in Iran, Iraq, Cuba, North Korea, Syria, Russia, Venezuela, Myanmar, Libya, Sudan, and Afghanistan.
    3. Third country reach: The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, proposing tariffs of up to 100 per cent on the top five buyers of Russian oil and natural gas, is a non tariff trade barrier that can influence third country transactions.
    4. Monetary spillover: Import dependence complicates monetary policy, as elevated United States inflation could keep the Federal Reserve’s rates higher for longer, strengthening the dollar and raising the rupee cost of each cargo.

    Why does proximity pricing matter?

    1. Definition: Proximity pricing is a market benefit where goods cost less when bought from a nearby place. Shorter travel distance means lower shipping costs and faster delivery.
    2. Loss of distance advantage: United States shipments take 25 to 35 days against 5 to 10 days from the Gulf, so India loses the advantage of proximity pricing.
    3. Two price benchmarks: United States LPG is Mont Belvieu propane based, while West Asian supply follows the Saudi Aramco Contract Price, and the Gulf fuel is usually cheaper at the disembarking point due to the shorter distance.
    4. Temporary reversal: Geopolitical risk has temporarily inflated West Asian supply costs, with the Saudi Contract Price rising from about 543 dollars per tonne in February to around 790 dollars in June, making United States cargoes competitive despite the longer voyage.

    How does India balance availability with cost optimisation?

    1. The core trade off: For a politically volatile fuel, ensuring supply outweighs cost optimisation, so India accepted higher priced United States cargoes to cut supply risk.
    2. Residual exposure: India may have cut Hormuz risk, but remains exposed to commodity price, dollar, and freight risks.
    3. Under recovery pressure: If domestic prices are held down while global prices rise amid rupee depreciation, oil companies’ under recoveries expand, worsening fiscal and external sector stress.

    What are the challenges to India’s LPG security?

    1. Single supplier concentration: Two thirds reliance on one country recreates the concentration risk the pivot was meant to solve.
    2. Stagnant domestic output: LPG production has stayed nearly flat while consumption grows, widening the import gap.
    3. Chokepoint vulnerability: Heavy dependence on the Strait of Hormuz leaves Gulf sourced volumes exposed to any regional conflict.
    4. Fiscal drain: Accumulated under recoveries of state oil marketing companies exceeded Rs 59,000 crore as of 31 July 2026.
    5. Currency and freight risk: Dollar denominated pricing and long shipping routes expose landed costs to exchange rate and freight swings.
    6. Thin strategic reserves: India lacks large dedicated LPG strategic reserves to buffer sudden supply shocks.

    Conclusion

    Energy security is not about replacing one supplier with another but ensuring no single player holds all the cards. India must strengthen local production, bolster multiple supply chains, and build more strategic reserves. Australia offers a shorter Indo Pacific route outside Hormuz, though its export volumes remain small.

    Back2Basics

    Energy Security and LPG in India (Foundational Context)

    1. About: Energy security means assured availability of energy at affordable prices with resilience against supply shocks. LPG security is a subset covering cooking gas access for households.
    2. Scale: Public sector oil marketing companies serve 33.14 crore active domestic LPG customers, growing at a compound annual growth rate of 7.6 per cent between 2015 and 2026.
    3. Consumption gap: LPG production was 4.3 million metric tonnes against consumption of 6.5 million metric tonnes in the first quarter of FY27, with the 2026-27 consumption estimate at 34,692 thousand metric tonnes.

    Key Facts about India’s LPG Sector

    1. Oil marketing companies: Indian Oil, Bharat Petroleum, and Hindustan Petroleum are the three public sector oil marketing companies distributing LPG.
    2. PPAC: The Petroleum Planning and Analysis Cell tracks LPG consumption, customer base, and pricing data.
    3. Crisis production ramp up: At the peak of the crisis, oil marketing companies raised cumulative daily LPG production from 34,000 metric tonnes to 55,000 metric tonnes.
    4. Output jump: First quarter FY27 LPG production rose 35.73 per cent year on year to 4.26 million metric tonnes after refineries diverted propane and butane streams into the LPG pool.

    Government Initiatives for LPG and Energy Security

    1. Pradhan Mantri Ujjwala Yojana: Provides free LPG connections to women from below poverty line households to promote clean cooking.
    2. PAHAL (DBTL): Directly transfers LPG subsidy to beneficiary bank accounts to curb diversion.
    3. Strategic Petroleum Reserves: Underground crude storage to cushion supply disruptions.
    4. Ethanol Blending Programme: Reduces import dependence in the broader energy basket.
    5. Long term supply agreements: State refiner contracts diversifying LPG sourcing across geographies.

    Way Forward

    1. Boost domestic output: Maximise refinery LPG yield and invest in production capacity to narrow the import gap.
    2. Diversify suppliers: Spread sourcing across the Gulf, the United States, Australia, and others to avoid single supplier dependence.
    3. Expand strategic reserves: Build dedicated LPG storage to buffer sudden shocks.
    4. Hedge price and currency risk: Use financial instruments to manage commodity, dollar, and freight exposure.
    5. Secure alternate routes: Develop supply chains outside the Strait of Hormuz to reduce chokepoint vulnerability.

    PYQ Relevance

    [UPSC 2025] “Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.” How would you integrate energy security with India’s foreign policy trajectories in the coming years?

    Linkage: The PYQ directly relates to energy security as a key driver of India’s foreign policy, especially in West Asia. India’s shift to US LPG highlights the need for supplier diversification, alternate routes and strategic autonomy in energy diplomacy.

  • Russia’s share in India’s oil imports jumps to 48% in June

    Why in the News

    Russia’s share in India’s crude oil imports rose to an all-time high of 48 percent in June 2026, even as India cut its total crude imports. This comes as the US Senate has passed a bill to levy tariffs of up to 100 percent on the top buyers of Russian oil and gas, placing India’s energy security and its trade exposure to the United States in direct tension.

    What is the Sanctioning Russia and Iran Act of 2026?

    1. Definition: The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 is a US bill that authorises secondary tariffs of up to 100 percent on countries that continue to buy Russian oil and gas. It targets the largest purchasers of these products from Russia.
    2. Status: The bill was passed by the US Senate and still requires passage by the US House of Representatives before it becomes law.

    What are the tariff triggers under the bill?

    1. Top-buyer test: Tariffs apply to a country that was among the five largest importers of Russian crude oil or natural gas in the 12 months preceding the Act’s enactment.
    2. Continuation test: The tariff applies if that country continues to import Russian oil or gas beyond 30 days after enactment.
    3. Sanctions-evasion clause: Tariffs can also be imposed on countries found to have helped Russia evade sanctions.
    4. India’s exposure: India, alongside China, is one of the top two importers of Russian oil, so it qualifies under these criteria.

    What do the June import figures show?

    1. Fall in total imports: June crude oil imports of 18.2 million metric tonnes (MMT) were 16.5 percent lower than in May 2026 and 13 percent lower than in June the previous year.
    2. Import bill still high: The June oil import bill was 22 percent lower than in May but still 40 percent higher than in June last year, due to elevated crude prices.
    3. Russian purchases held up: India imported 8.7 MMT of Russian oil in June, only 1 percent lower than May and 25 percent higher than a year earlier.
    4. Record Russian share: Russia’s share reached 48 percent by quantity and 48.6 percent by value, rising every month since March.
    5. UAE at a high: The United Arab Emirates (UAE) supplied 17.5 percent of imports by volume and 18 percent by value, its highest share so far.
    6. Concentration: Russia and the UAE together accounted for nearly two-thirds of India’s oil imports in June, the highest combined share from any two countries.
    7. Shrinking discount: The premium Russia charged India rose from a discount as recently as February 2026 to a premium of $10.6 per tonne in June, down from $77.7 per tonne in April.

    How has India pre-empted sanctions exposure?

    1. Ship-to-ship transfers: The Ministry of Petroleum and Natural Gas said exposure was pre-empted through ship-to-ship transfer operations in international waters via the Red Sea route through Yanbu and Fujairah.
    2. Avoiding a single choke point: The aim was to ensure that no single choke point or sanctions regime could halt India-bound cargo.
    3. Refinery flexibility: Indian refineries spent a decade acquiring the flexibility to switch between crude grades and shipping routes when disruption struck.

    Why does the record Russian share expose India?

    1. Energy security dependence: India cannot quickly cut back on Russian oil while supplies through the Strait of Hormuz remain constrained by the West Asia conflict.
    2. Trade and tariff risk: Continued high Russian purchases place India within the top-buyer criteria of the US bill, risking tariffs of up to 100 percent.
    3. Ambiguity on evasion: It is unclear whether India’s ship-to-ship arrangements would be treated as helping Russia evade sanctions.

    Conclusion

    India’s rising dependence on discounted Russian crude has hit a record 48 percent share, secured through diversified shipping routes even as total imports fell. This leaves India balancing its energy security against the risk of secondary tariffs under the US bill. The immediate milestone is the bill’s fate in the US House of Representatives, which will determine whether the tariff threat becomes law.

    Back2Basics:

    Strait of Hormuz

    1. Designation: A narrow strait linking the Persian Gulf to the Gulf of Oman and the Arabian Sea.
    2. Bordering states: Bordered by Iran to the north and Oman and the UAE to the south.
    3. Significance: One of the world’s most critical oil transit choke points, carrying a large share of seaborne crude.

    What is Energy Security? (Foundational Context)

    1. About: Energy security is the uninterrupted availability of energy sources at an affordable price.
    2. Rationale: It matters because India imports the bulk of its crude oil, leaving growth and prices exposed to external supply shocks.
    3. Core dimensions: It rests on availability, affordability, accessibility, and diversification of both sources and supply routes.

    Key Facts about India’s Oil Imports

    1. Import dependence: India imports over 85 percent of its crude oil requirement.
    2. Global standing: India is among the world’s largest crude oil importers and consumers.
    3. Key choke point: The Strait of Hormuz, between the Persian Gulf and the Arabian Sea, carries a large share of India’s West Asian crude.

    Challenges to India’s Energy Security

    1. High import dependence: Reliance on imports for most crude exposes the economy to price and supply shocks.
    2. Geopolitical concentration: A large combined share from Russia and the UAE concentrates supply risk in two sources.
    3. Choke-point vulnerability: Disruption at the Strait of Hormuz can constrain West Asian supply.
    4. Sanctions exposure: Purchases from sanctioned suppliers risk secondary tariffs and financial penalties.
    5. Price volatility: War-driven crude price spikes inflate the import bill and widen the current account deficit.

    Way Forward

    1. Diversify sources: Expand purchases from a wider set of suppliers to reduce concentration.
    2. Build strategic reserves: Enlarge strategic petroleum reserves to cushion supply shocks.
    3. Accelerate clean energy: Scale up renewables, biofuels, and electric mobility to cut import dependence over time.
    4. Secure shipping routes: Maintain logistical flexibility across grades and routes to withstand choke-point disruption.

    PYQ Relevance

    [UPSC 2025] Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries. How would you integrate energy security with India’s foreign policy trajectories in the coming years?

    Linkage: The PYQ examines the integration of India’s energy security with its foreign policy. India’s record 48% dependence on Russian crude highlights the geopolitical dimension of energy security. The article shows the need to diversify suppliers and routes while balancing ties with Russia, the US and West Asia.

  • Import diversification alone cannot secure India’s energy

    Why in the News?

    Diversifying import sources cannot by itself secure India’s energy supply while crude and gas still transit a few chokepoints. The tension is between the visible fix of new suppliers and the hidden vulnerability of the routes those supplies travel.

    What is the energy security problem being described?

    1. Route dependence: India’s crude and Liquefied Petroleum Gas (LPG) flows still pass through a handful of maritime chokepoints.
    2. Supplier shift alone: Adding new source countries does not remove the risk if the shipping route stays the same.

    Which chokepoints concentrate the risk?

    1. Strait of Hormuz: The Gulf’s primary oil export chokepoint, exposed to conflict escalation.
    2. Bab el-Mandeb: The Red Sea gateway threatened by Houthi attacks on shipping.

    How does external policy compound the exposure?

    1. US tariff pressure: Trade measures constrain India’s room to optimise import decisions.
    2. Conflict spillover: West Asia instability raises both price and insurance costs.

    What structural response does the argument imply?

    1. Strategic reserves: Deeper petroleum reserves buffer supply shocks.
    2. Domestic transition: Faster renewable and storage build out reduces import dependence over time.

    Conclusion

    The central idea is that supplier diversification treats the symptom, not the structural route risk. Real energy security needs resilience against chokepoint disruption, not just a longer supplier list.

    PYQ Relevance

    [UPSC 2017] The question of India’s Energy Security constitutes the most important part of India’s economic progress. Analyze India’s energy policy cooperation with West Asian Countries.

    Linkage: The PYQ examines India’s energy security through its dependence on West Asian energy supplies and strategic partnerships. The article highlights how chokepoint dependence and regional instability can undermine India’s energy security despite diversification of suppliers.

  • India cushions energy security against the Strait of Hormuz disruption

    Why in the News?

    India’s Liquefied Natural Gas (LNG) imports rose despite disruption to shipping through the Strait of Hormuz during the West Asia conflict. Imports were diversified to the United States, Nigeria, Oman, and Angola as supply from Qatar collapsed. The Oil and Natural Gas Corporation (ONGC) will also reserve half its Mangaluru facility as a strategic petroleum reserve, exposing the link between supply diversification and physical storage in energy security.

    What is the Strait of Hormuz?

    1. The Strait of Hormuz is the narrow waterway between Iran and Oman connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is a critical energy chokepoint.
    2. Strategic weight: The strait usually carries about a fifth of global oil and LNG shipments. Its disruption during the conflict threatened a large share of India’s gas supply.

    What is Liquefied Natural Gas (LNG)?

    1. Definition: LNG is natural gas cooled to liquid form for transport by ship over long distances. It is regasified at import terminals for use.
    2. India’s dependence: LNG imports meet about half of India’s natural gas requirement. Around 60% of those imports came through the Strait of Hormuz, mainly from Qatar and the UAE.

    How did India cushion the disruption?

    1. Higher overall imports: LNG imports in May-July rose 15.4% year-on-year to 7.08 million tonnes. This followed a near 13% dip in March-April, the first two months of the war.
    2. Supplier diversification: The United States supplied 2.19 million tonnes, up sharply year-on-year. Oman, Nigeria and Angola also rose steeply.
    3. Russian Crude: Russia increased its share to supply roughly 40% of India’s crude imports, bypassing the Hormuz chokepoint entirely.
    4. Collapse of traditional sources: Supply from Qatar plunged 91.3% to 0.23 million tonnes, against a monthly average of 1 million tonnes in 2025. UAE fell 34.4% to 0.55 million tonnes.
    5. Supply over price: India prioritised securing volumes over price to meet demand from city gas, fertiliser, power, and ceramics. LNG prices are expected to stay high, near 19 to 20 dollars per million British thermal units.
    6. Infrastructure Adaptability: West coast terminals like Mundra handled very large crude carriers (VLCCs) from non-Middle Eastern channels.
    7. Ethanol Blending: E20 petrol implementation reduced overall crude import demand by substituting 20% of domestic petrol with local ethanol.

    What is a Strategic Petroleum Reserve?

    1. Definition: A strategic petroleum reserve is a stockpile of crude oil held to cushion supply shocks and price spikes. It is drawn down during import disruptions.
    2. ONGC facility: ONGC is developing a 1.75 million metric tonne facility at Mangaluru. Half of this storage will be reserved as strategic storage, with the rest for commercial operations.
    3. Current buffer: India’s existing crude and petroleum product storage can meet about 74 days of net crude import requirements. The government plans an additional 6.5 million metric tonnes, including at Chandikhol in Odisha and Padur in Karnataka.

    What are the challenges to India’s energy security buffer?

    1. Chokepoint concentration: A single waterway still carries most of India’s Gulf LNG. Any renewed closure of the strait re-exposes this dependence.
    2. Price-driven demand loss: High LNG prices push price-sensitive sectors like industry and power to alternative fuels. This demand destruction undercuts LNG’s role in the energy mix.
    3. Storage gap: A 74-day buffer sits below the 90-day cover the International Energy Agency recommends. Planned reserves are years from completion.
    4. Import dependence: India imports the bulk of its crude and much of its gas. Diversification reduces but does not remove the exposure to external shocks.
    5. Transit workarounds: Some suppliers exported by switching off tanker transponders to evade detection. Such tactics reflect the fragility of normal shipping through the region.

    Conclusion

    India managed the Hormuz disruption by rapidly re-routing LNG procurement to unaffected suppliers rather than cutting imports. The current status is a diversified supplier mix dominated by the United States and Oman, with strategic storage being expanded at Mangaluru and new sites. The next milestone is commissioning the additional 6.5 million tonnes of reserve capacity to lift the buffer toward international norms.

    Back2Basics

    Strategic Petroleum Reserve (SPR)

    1. Definition: A Strategic Petroleum Reserve (SPR) is an emergency crude oil stockpile to protect against supply and price shocks.
    2. Manager: India’s SPR programme is run by Indian Strategic Petroleum Reserves Limited (ISPRL) under the Ministry of Petroleum and Natural Gas.
    3. Phase I sites: Visakhapatnam, Mangaluru, and Padur, with a combined capacity of about 5.33 million metric tonnes.
    4. Global benchmark: The International Energy Agency recommends reserves covering 90 days of net oil imports.
    5. Hormuz significance: The Strait of Hormuz handles roughly a fifth of global oil and LNG trade, making it the world’s most critical oil chokepoint.

    PYQ Relevance

    [UPSC 2025] ‘Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.’ How would you integrate energy security with India’s foreign policy trajectories in the coming years?

    Linkage: UPSC recognises energy security as a key determinant of India’s foreign policy and strategic engagement with West Asia. The article shows how supplier diversification, strategic petroleum reserves, and secure maritime supply routes strengthen India’s energy security amid geopolitical disruptions.

  • The question of India’s Energy Security constitutes the most important part of India’s economic progress. Analyze India’s energy policy cooperation with West Asian Countries.

  • Clean energy is the order of the day. Describe briefly India’s changing policy towards climate change in various international fora in the context of geopolitics.

    Climate change has emerged as a global security and geopolitical concern. India, 3rd-largest energy consumer, has transitioned from a “climate obstructionist” to a “climate leader and solution provider”

    Clean Energy is the Order of the Day

    Combating Climate Change – Transition to renewables

    Social Benefits – women’s health. (Ujjwala Scheme)

    Economic Benefits – lowering Current Account Deficit (CAD).

    India’s role as a “Vishwaguru of sustainability”

    Geopolitics of Climate Change

    Oil geopolitics (Middle East)

    China’s monopoly in critical minerals (over 90%)

    Green tariffs and carbon taxes. Eg- EU’s Carbon Border Adjustment Mechanism

    North-South Divide and Climate Justice Diplomacy

    Climate-linked Geoeconomics – Eg- G20 Green Development Pact (2023)

    Climate and Security Interlinkages – Climate-induced disasters

    Emerging ‘Energy Identity Politics’

    EU as a “Green Regulatory Power.”

    China as “Green Manufacturing Hub.”

    India as a “Responsible Global South Leader.”

    India’s Changing Policy Towards Climate Change in Various International Fora

    Early Phase -Defensive Stance (Pre-2010)

    Advocated equity and right to development under Kyoto Protocol (1997).

    Opposed binding emission targets for developing countries.

    Supported the principle of CBDR and respective capabilities.

    Shift from defensive to constructive negotiation (2010-2015)

    Copenhagen (2009) & Cancún (2010): Voluntary emission intensity reduction (20-25% by 2020).

    Formation of BASIC bloc (Brazil, South Africa, India, China) to represent emerging economies.

    Leadership Phase (Post-2015 -Present)

    Paris Agreement (2015): India’s NDCs –

    Reduce emission intensity by 33-35% by 2030.

    Achieve 40% non-fossil fuel-based power capacity.

    Create carbon sink of 2.5-3 billion tonnes CO₂ through afforestation.

    COP-26 (Glasgow, 2021): Announced “Panchamrit” commitments -including Net Zero by 2070 and 50% energy capacity from renewables.

    UNFCCC (COP28): Leading Global South demand for loss and damage fund and fair carbon markets.

    Global South Leadership – Eg- FIPIC (Forum for India-Pacific Islands Cooperation)

    International Solar Alliance (ISA, 2015): Jointly launched with France to mobilize solar adoption across 100+ countries.

    Coalition for Disaster Resilient Infrastructure (CDRI, 2019): Focus on climate-resilient infrastructure in developing nations.

    G20 Presidency (2023): Advocated Green Development Pact and Just Energy Transition for Global South.

    Quad Climate Group: Promoting clean hydrogen, green shipping, and resilient supply chains.

    BRICS & SCO: Advocates equitable climate finance, green technology transfer, and multipolar environmental governance.

    India’s other efforts towards climate change and Clean energy

    National Action Plan on Climate Change (NAPCC)

    National Solar Mission (280 GW solar capacity by 2030)

    National Green Hydrogen Mission (5 MMT by 2030)

    One Sun, One World, One Grid (OSOWOG)

    IPEF (Indo-Pacific Economic Framework): Includes clean energy, decarbonisation.

    As per Dhanasree Jayaram (Climate Diplomacy and Emerging Economies) India has evolved from a ‘naysayer’ to a ‘responsible’ player in Climate Diplomacy.

  • “Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.” How would you integrate energy security with India’s foreign policy trajectories in the coming years?

    India is the world’s 3rd largest energy consumer, importing over 85% of its crude oil and 55% of natural gas. The Middle East accounts for nearly 60% of India’s crude imports.

    Energy Security is dominant kingpin of India’s foreign policy due to

    India’s energy demand is projected to double by 2040 (IEA). Energy diplomacy is central to India’s economic growth and geopolitical outreach.

    Geopolitical Risks – Instability in West Asia (Iran-Israel tensions, Strait of Hormuz) threatens supply chains.

    Price Volatility – Fluctuating global oil prices widen India’s current account deficit.

    US sanctions on Iran, Venezuela, Russia limit India’s diversification options

    China’s aggressive investments in overseas oilfields and LNG projects crowd out India. Eg- in Africa

    Infrastructure Gaps – Limited strategic petroleum reserves, LNG terminals, and pipelines.

    Integrating Energy Security with India’s Foreign Policy

    A. Short-Term Measures (2025-2030)

    Diversification of Suppliers- Expand sourcing from US, Russia, Africa, and Latin America.

    Expand Strategic Petroleum Reserves capacity from 5.3 MMT to 10 MMT.

    Chabahar & INSTC Connectivity- Use Iran-Central Asia corridor to secure overland energy routes and bypass chokepoints.

    Maritime and Energy Diplomacy- Strengthen cooperation with UAE, Saudi Arabia, and Oman for logistics bases and secure sea lines of communication.

    Financial Resilience- Develop Rupee-based oil trade and local currency settlements to cushion against dollar volatility and sanctions.

    B. Long-Term Measures (2030-2050)

    “Nearshoring” energy supplies and greening the Indian grid under Neighbourhood First policy. Eg- hydropower projects in Nepal

    Review of Civil Liability for Nuclear Damage Act and Atomic Energy Act for FDI in civil nuclear power.

    Green Energy Partnerships-

    Collaborate with Gulf nations on green hydrogen, solar parks, and carbon capture (India-UAE Green Energy Corridor).

    Promote India as a global hub for renewable technology and green financing.

    Energy Investments Abroad-

    Scale ONGC Videsh and IOCL investments in upstream oil and gas fields in Iraq, UAE, Mozambique, and Russia.

    Establish a Sovereign Energy Investment Fund for strategic acquisitions.

    Critical Minerals Diplomacy- Partner with CAR and African nations for lithium, nickel, and cobalt supply chains.

    Institutional Integration- Create an Energy Diplomacy Wing within MEA for coherent foreign policy alignment.

    “Energy security is not just about fuel, it is about strategic autonomy, and India’s foreign policy must secure both.” – M.K.Narayanan