India’s growing fuel demand and its call for increased oil output from OPEC+ reflect the country’s evolving energy needs. As the world’s third-largest oil importer and consumer, India is significantly dependent on international markets, with over 80 per cent of its oil supply coming from abroad. This dependence leaves India vulnerable to fluctuations in global oil prices and production decisions by large producers, making it crucial for the country to push for policies that align with its economic interests. The request for OPEC+ to raise oil output comes at a time when global energy dynamics are becoming increasingly complex. OPEC+, which includes oil-rich nations like Saudi Arabia and Russia, plays a critical role in determining global oil supply.
The group’s recent decision to delay a planned increase in output for October and November points to caution amid uncertain economic conditions and potential price volatility. For India, this is concerning, as higher global
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oil prices
could disrupt its domestic economy and lead to inflationary pressures, particularly in the transport and manufacturing sectors. India’s rising fuel demand can be attributed to several factors, including its expanding industrial base, a growing middle class, and rapid urbanisation. With the country undergoing significant economic development, energy consumption is naturally on the rise, making a stable and affordable oil supply a priority for policymakers. For India, ensuring energy security is not just about meeting immediate consumption needs, but also about sustaining long-term growth and maintaining global competitiveness. One of the key strategies India has employed in recent months is diversifying its oil sources. Notably, India became the largest buyer of Russian oil in July, surpassing China.
This shift toward Russian crude is driven primarily by cost considerations, as India’s refiners are looking for suppliers offering the most competitive rates. However, this strategy is not without geopolitical implications, as the broader global context of sanctions and shifting alliances adds layers of complexity to India’s oil procurement policies. Balancing economic pragmatism with geopolitical sensibilities will continue to be a challenge for Indian policymakers. In addition to its request for higher output from OPEC+, India is closely watching global crude prices, with an eye on domestic fuel prices. If global oil prices remain subdued, Indian fuel retailers may have room to lower pump prices, which would bring much-needed relief to consumers facing the pinch of inflation. This would also have a positive impact on transportation costs and industrial production, further fuelling economic activity.
Ultimately, India’s call for increased oil output from OPEC+ underscores its dependence on external sources for its energy needs. As global markets remain volatile, India will need to continue diversifying its suppliers, investing in alternative energy sources, and advocating for international cooperation to ensure a stable, affordable, and sustainable energy future. Balancing domestic economic priorities with global oil politics will be critical for India as it navigates the evolving energy landscape.