{"id":34239,"date":"2024-12-24T19:31:02","date_gmt":"2024-12-24T14:01:02","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=34239"},"modified":"2025-07-16T18:16:08","modified_gmt":"2025-07-16T12:46:08","slug":"india-crude-oil-reserves","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/24-12-2024\/india-crude-oil-reserves","title":{"rendered":"India\u2019s Crude Oil Reserves"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>According to a report by the Lok Sabha\u2019s Standing Committee on petroleum and natural gas India\u2019s crude reserves are currently around <strong>3.61 million tonnes, which is 67% of their rated capacity.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Highlights by the Committee:&nbsp;<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Maintaining Optimum Reserves: <\/strong>The Committee recommended the Ministry of Petroleum and Natural Gas to maintain the optimum level of Indian Strategic Petroleum Reserves.<\/li>\n\n\n\n<li><strong>Budgeting:<\/strong> The government had allocated Rs 5,000 crore in the budget estimates 2023-24 for filling up crude oil reserves.\n<ul class=\"wp-block-list\">\n<li>The Committee finds the capital expenditure of the Ministry and Oil PSUs in the current financial year inadequate.&nbsp;<\/li>\n\n\n\n<li>It recommended an increase in the allocation towards capital expenditure in the next possible opportunity.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Indian Strategic Petroleum Reserves<\/strong> was set up with an objective to ensure energy security for the country in the event of oil shocks.\n<ul class=\"wp-block-list\">\n<li>Under the Budget Estimate 2024-25, the finance ministry has allocated an amount of Rs 408 crore for construction of underground caverns in Phase \u2013 II of Indian Strategic Petroleum Reserves.&nbsp;<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Concern:<\/strong> The Committee highlighted that a cautious approach is required for maintenance of sufficient buffer stock of crude oil due to the highly uncertain geopolitical scenario around the world, primarily the major suppliers of crude oil.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Crude Oil Imports by India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India\u2019s reliance on imported crude oil climbed to 88.2% during the first six months of FY25, up from 87.6% in the same period of FY24.<\/li>\n\n\n\n<li>India is the <strong>world\u2019s third largest crude oil importer.&nbsp;<\/strong><\/li>\n\n\n\n<li><strong>India&#8217;s main sources of crude oil imports<\/strong> are Iraq, Saudi Arabia, Russia, United States and the United Arab Emirates.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img data-dominant-color=\"e6dcdb\" data-has-transparency=\"false\" style=\"--dominant-color: #e6dcdb;\" loading=\"lazy\" decoding=\"async\" width=\"396\" height=\"230\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/12\/Crude-Oil-Imports-by-India.webp\" alt=\"Crude-Oil-Imports-by-India\" class=\"not-transparent wp-image-34240\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/12\/Crude-Oil-Imports-by-India.webp 396w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/12\/Crude-Oil-Imports-by-India-300x174.webp 300w\" sizes=\"auto, (max-width: 396px) 100vw, 396px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The top five oil-producing nations in 2024 <\/strong>were the United States, Saudi Arabia, Russia, Canada, and China.<\/li>\n\n\n\n<li><strong>The top oil-consuming countries<\/strong> in the world are the United States, China, India, Russia and Saudi Arabia.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges Faced by the India in Crude Oil Imports:&nbsp;<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Price Volatility:<\/strong> Fluctuating global oil prices significantly impact India&#8217;s import costs, affecting its economy and inflation.<\/li>\n\n\n\n<li><strong>Geopolitical Risks:<\/strong> Political instability or conflicts in key oil-producing regions (like the Middle East, Russia, and Venezuela) disrupt supply chains and cause price spikes.<\/li>\n\n\n\n<li><strong>Dependence on Imports:<\/strong> India relies on imports for about 85% of its crude oil, making it vulnerable to disruptions in supply and external factors.<\/li>\n\n\n\n<li><strong>Exchange Rate Fluctuations:<\/strong> As India pays for crude oil in US dollars, changes in the exchange rate increase costs, especially when the rupee weakens.<\/li>\n\n\n\n<li><strong>Environmental Concerns: <\/strong>Crude oil extraction and consumption contribute to environmental issues, pushing India to balance energy needs with sustainability.<\/li>\n\n\n\n<li><strong>Diversification of Sources:<\/strong> India&#8217;s effort to diversify its sources of oil can be challenging due to competition and varying terms from different suppliers.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Steps Taken by India to Manage its Crude Oil Imports:&nbsp;<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Diversification of Supply Sources:<\/strong> India is expanding its oil import base by sourcing crude from multiple countries, including Iraq, Saudi Arabia, the UAE, U.S. and even Russia to reduce dependency on any single region.<\/li>\n\n\n\n<li><strong>Strategic Petroleum Reserves (SPR):<\/strong> India has developed strategic oil reserves to ensure supply during emergencies or geopolitical disruptions.<\/li>\n\n\n\n<li><strong>Promotion of Domestic Production:<\/strong> India is encouraging domestic exploration and production of oil through initiatives like the Hydrocarbon Exploration and Licensing Policy (HELP) to increase self-sufficiency.<\/li>\n\n\n\n<li><strong>Energy Efficiency and Alternatives: <\/strong>India is investing in renewable energy and improving energy efficiency to reduce overall reliance on crude oil.<\/li>\n\n\n\n<li><strong>Bilateral Agreements:<\/strong> India has signed long-term agreements with countries like Saudi Arabia, Iraq, and Russia to ensure stable and reliable oil supplies.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India aims to boost domestic exploration and production to reduce import dependence and improve energy security.<\/li>\n\n\n\n<li>Expanding renewable energy capacity (solar, wind, biofuels) will help diversify India&#8217;s energy mix and reduce reliance on fossil fuels.<\/li>\n\n\n\n<li>Expanding the <a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/20-06-2025\/oil-prices-increase-amidst-iran-israel-tensions\"><strong>Strategic Petroleum Reserve (SPR)<\/strong><\/a> to ensure adequate supply in times of crisis.<\/li>\n\n\n\n<li>To manage price volatility, India can explore more hedging strategies and long-term agreements with suppliers for stable prices.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.financialexpress.com\/policy\/economy-indias-crude-oil-storage-at-67-per-cent-of-capacity-3696661\/\" target=\"_blank\" rel=\"noopener\"><strong>FE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to a report by the Lok Sabha\u2019s Standing Committee on petroleum and natural gas India\u2019s crude reserves are currently around 3.61 million tonnes, which is 67% of their rated capacity.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-34239","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/34239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=34239"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/34239\/revisions"}],"predecessor-version":[{"id":48254,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/34239\/revisions\/48254"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=34239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=34239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=34239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}