India is gradually reducing its dependence on the oil-rich Sheikhdoms of the Middle East and the member countries of the Organisation of Petroleum Exporting Countries OPEC for its crude supplies.
In a written reply, Rameswar Teli, Minister of State for Petroleum Natural Gas, informed the Rajya Sabha that the country has started sourcing crude oil from multiple geographical locations to ensure the security of crude oil supply lines by easing dependence on any single region.
The ministry of petroleum natural gas released a statement saying that this had been done to ensure the security of crude supplies and to mitigate the risk of dependence on crude oil from a single region.
In the financial year 2020-21, the country imported a large portion of its crude oil supplies from Iraq, the US, Nigeria, Saudi Arabia and the UAE. The Middle East's share in the country's import basket of oil was over 50 per cent, followed by Africa and the US.
The decision by the 14-member OPEC in the April-June quarter of 2020 to cut crude oil supply by a record 9.7 million barrels - about 10 per cent of global output - led to the central government to fast-track its review of international oil supply contracts. The search for alternatives from non-OPEC countries was further exacerbated by the rise in domestic fuel prices.
Oil public sector undertakings such as Indian Oil Corp Ltd IOCL have diversified their purchases from across geographies to include Africa, the Americas and Australia. Among the countries where crude is sourced were the United States, Russia, Canada, Australia, Brazil, Guyana, Norway, Egypt, Gabon, Ghana, Congo, Equatorial Guinea, Libya and Nigeria.
Kirit Parikh, Chairman and founder of the New Delhi-based energy think-tank Integrated Research and Action for Development IRADe said, This diversification in our sources of import makes us less vulnerable to cartelisation attempts by global suppliers. Our domestic production has failed to keep pace while our dependence on imports is growing. Parikh suggested that the country must look at alternative sources of energy like ethanol to reduce its dependence on imported crude.
India is the third largest consumer of oil, and is heavily dependent on imports. In FY 2020 -- 21 India produced 30.5 MMT of crude, while it imported 198.1 MMT of the commodity worth $62.7 billion during the same period.