India's Energy Security at Risk: Parliamentary Committee Calls for Diversification of Crude Oil Sources

A recent report from a parliamentary committee highlights India's alarming dependence on imported crude oil, which poses significant risks to the nation's energy security. With nearly 89% of its crude oil sourced from abroad, India is vulnerable to global disruptions caused by geopolitical tensions. The committee urges the government to diversify its crude oil supply sources and enhance strategic reserves. It also emphasizes the need for improved risk management and closer diplomatic ties with oil-producing nations. Amidst the ongoing conflict in Ukraine, Indian companies face potential sanctions for purchasing Russian oil, further complicating the energy landscape. This report sheds light on the urgent need for India to reassess its energy strategies.

By Narendra Chaudhary Dec 16, 2025, 15:48 IST

Concerns Over Energy Security

A parliamentary committee has raised alarms regarding India's significant reliance on imported crude oil, highlighting the increasing geopolitical risks that threaten the nation's energy security. The committee has urged the government to explore a wider range of supply sources.

In a report presented to the Lok Sabha, the Public Undertaking Committee revealed that India is dependent on imports for nearly 89% of its crude oil needs, making it susceptible to global disruptions stemming from conflicts, sanctions, and civil unrest in oil-producing regions, as well as interruptions in vital shipping routes like the Suez Canal and the Red Sea.

The report emphasized that recent global incidents, particularly the Russia-Ukraine conflict and ongoing tensions in the Middle East, have exposed the fragility of India's energy supply chain and its reliance on international trade.

To mitigate these risks, the committee recommended that the Ministry of Petroleum and Natural Gas, along with state-owned oil companies, enhance their efforts to diversify crude sourcing both geographically and through different contracts. They also suggested expanding strategic petroleum reserves and developing alternative import pathways.

Furthermore, the report called for improved risk management strategies, including better hedging practices, revenue diversification, and operational efficiency, alongside cost optimization through digital transformation and energy efficiency initiatives.

Internal challenges within the oil and gas sector were also noted, such as aging oil fields, project delays, rising land acquisition issues, and domestic crude production lagging behind capital investments.

The committee urged closer collaboration between the Ministry of Petroleum and Natural Gas and the Ministry of External Affairs to enhance diplomatic relations with oil-producing countries, secure favorable investment conditions, and address taxation and regulatory challenges faced by Indian firms abroad.

Since the onset of the Ukraine conflict in February 2022, Indian companies have encountered potential Western sanctions for acquiring oil from Russia. U.S. President Donald Trump has repeatedly asserted that such purchases are financing Moscow's military actions. In August, his administration increased tariffs on Indian goods to 50% in response to India's ongoing imports of Russian crude, a move that India deemed “extremely unfortunate.”

On November 10, Trump indicated that tariffs might be reduced “at some point” and claimed that India had decreased its Russian oil purchases. Subsequently, on November 20, Reliance Industries ceased its imports of Russian oil for its Jamnagar refinery in Gujarat, which previously accounted for about half of India's total imports from Russia.