Changing Geo-politics of Oil and the Impact on India

Abstract

Oil is a much sought after resource in the modern world economy. Until the previous decade, Middle East was thought to hold the maximum proven reserves of oil. This provided an incentive for western nations to maintain peace and stability in the region. However, discovery of new oil reserves in Brazil, Venezuela, Canada, Alaska and Russia, have challenged the status quo. Emerging Asian economies, namely India and China, will have to deal with an unstable supplier for one of the most important components in their energy portfolio.Given the situation, India is especially at risk as it imports almost 70% of its oil requirement, up to 65% of which originates from the Middle East. In a disruptive scenario of disturbance in the Middle East, India would find it difficult to meet its oil needs, jeopardizing its energy future. This paper analyzes India's energy consumption pattern, consumption of oil and oil products over the past four decades and the composition of India's oil import sources over the past five years. Finally, a model is proposed to secure India's energy future.