India imports over 85% of its crude oil and more than 50% of its natural gas. This is not just an economic figure. It belongs in our national risk register. As conflict zones multiply, sea lanes narrow and supply chains fragment, every imported barrel becomes a liability.
In this landscape, Russian oil has become India’s biggest swing factor. Since 2022, Russia has emerged as the country’s single largest supplier, accounting for roughly 35%-40% of total crude imports in 2024-25 — up from barely 2% before the Ukraine war. While discounted barrels have offered temporary relief to the import bill, the heavy concentration also underscores the vulnerability of relying too much on one geopolitical partner. Diversification, not substitution, is the real currency of sovereignty.
In FY2023-24, India’s merchandise imports stood at $677 billion. Of this, crude oil and natural gas alone accounted for nearly $170 billion, or over 25% of the total import bill. This outflow of foreign exchange pressures the rupee, inflates the trade deficit, and compromises macroeconomic stability.
In June 2025, the world narrowly avoided a full-blown regional conflict following tensions between Israel and Iran. Had that flashpoint ignited, over 20 million barrels a day of global oil flows would have been threatened. Brent crude prices, already sensitive, could have breached the $103 a barrel mark within days. The war did not begin, but the world came close enough to remember just how fragile its energy lifelines are.
Flashpoints that changed the world
Global energy security has been reshaped by unforeseen shocks. There are five defining moments.
First, the 1973 oil embargo. The Arab oil embargo against the United States and allied nations caused crude prices to quadruple, and exposed the West’s overdependence on the Organization of the Petroleum Exporting Countries. But it catalysed the creation of strategic petroleum reserves, efficiency mandates, and diversified sourcing strategies.
Second, the 2011 Fukushima nuclear disaster. A tsunami-induced nuclear meltdown in Japan triggered a global crisis of confidence in nuclear power. However, with emissions rising due to increased coal and gas use, nuclear energy is again regaining favour.
Third, the 2021 Texas Freeze. Extreme cold froze gas pipelines and disabled wind turbines in energy-rich Texas. The event underscored the limits of systems built for cost efficiency rather than resilience and the importance of diversified and weather-hardened infrastructure.
Fourth, the 2022 Russia-Ukraine war. Europe’s reliance on Russia for over 40% of its gas ended abruptly when Russia weaponised energy. The continent faced record liquefied natural gas prices and a coal revival. It was a stark lesson: no energy strategy is sovereign if it is single-sourced.
Fifth, the 2025 Iberian Peninsula Blackout. Spain and Portugal suffered a grid collapse due to over-reliance on intermittent renewables without sufficient dispatchable backup. The lack of inertia in the grid exposed the risks of phasing out conventional capacity too rapidly. These events remind us that every major pivot in global energy thinking has followed a breakdown. What we face now is the opportunity to pivot by foresight rather than by force — and the Israel-Iran ceasefire is that opportunity.
Despite the rhetoric of global energy transition, the real picture is sobering. Fossil fuels still meet over 80% of global primary energy demand. More than 90% of transportation runs on hydrocarbons. Solar and wind, though scaling fast, are still under 10% of the global energy mix. Exploration investments in oil and gas have fallen sharply even as demand remains high. The result is a structurally tight supply that is vulnerable to even minor shocks.
Energy realism must guide the transition
Energy realism does not reject transition. It enables it. It means understanding that transitions are pathways, not switches. The lesson from all these flashpoints is clear. Energy security is no longer a climate policy discussion. It is a survival strategy.
India must now decisively move toward an energy sovereignty doctrine that is anchored in domestic capacity, diversified technology, and resilient systems. It has five foundational pillars.
First, coal gasification and unlocking indigenous energy. India has over 150 billion tonnes of coal reserves. For decades, high ash content made them unattractive. But with technological advances in gasification and carbon capture, this domestic resource must be leveraged to produce syngas, methanol, hydrogen and fertilizers. We must overcome the ash barrier with innovation.
Second, biofuels or where rural empowerment meets national security. The ethanol blending programme has already reduced crude imports and transferred over ₹92,000 crore to farmers. It has also delivered substantial savings in foreign exchange savings. With E20 on the horizon, annual income to the rural economy may grow further. Through the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme, hundreds of compressed biogas (CBG) plants are generating clean fuel and producing bio-manure rich in 20%-25% organic carbon. This can restore North India’s degraded soils, where organic carbon has fallen to 0.5%, versus a healthy level of 2.5%. Improving soil health also enhances water and fertilizer retention, reducing runoff and pollution.
Third, nuclear or a zero-carbon baseload for a dispatchable future. India’s nuclear footprint has remained stagnant at 8.8 GW for too long. We must revive the thorium road map, secure uranium partnerships and localise Small Modular Reactor technologies. In a grid dominated by renewables, nuclear provides the dispatchable backbone.
Fourth, green hydrogen, or ‘own the tech, secure the chain’. India’s target of five million metric tonnes a year by 2030 must be matched by localised electrolyser manufacturing, catalyst development and storage systems. The goal is not just green hydrogen. It is sovereign hydrogen.
Fifth, pumped hydro storage or the inertia backbone. Pumped hydro is durable, proven, and essential for grid balancing. It complements renewable energy and provides the inertia missing in wind and solar-heavy systems. India must use its topography to create the storage infrastructure of the future. Until a few years ago, India sourced over 60% of its crude oil from West Asia. That figure is now below 45%, as per S&P Global Commodities at Sea. This is not a short-term workaround but reflects a deliberate long-term shift in India’s sourcing strategy.
The age of sovereignty
The Israel-Iran ceasefire offers India a rare chance to act without the scars. India must lead with energy realism — not as a fallback but as the foundation of resilience and sovereignty. It has diversified its sources, reduced dependence on Hormuz, and buffered better than ever. Now is the time to deepen that shift as the next crisis may not give it the courtesy of a warning.
The 21st century will not be defined by new oil discoveries. It will be defined by nations that can secure, store, and sustain their energy without fear or favour. India’s strategy must blend ambition with realism. The five pillars — coal gasification, biofuels, nuclear, green hydrogen and pumped hydro — are not secondary to the energy transition. They are its sovereign spine. Tomorrow’s most precious resource is not oil. It is uninterrupted, affordable, and indigenous energy. This is the time to build it.
Shrikant Madhav Vaidya is former Chairman, Indian Oil Corporation Ltd., an Energy Policy Adviser, an institutional leader and an advocate for resilient transitions