The specter of the global energy crisis, which draws uneasy parallels with the oil shocks of the 1970s, is once again haunting countries. Yet, while the analogy is attractive, the present moment is arguably more complex and structurally uncertain. It is not just supply disruptions, but the convergence of geopolitics, market manipulation, strategic chokepoints and fragile supply chains. For India, the world’s third-largest oil importer, the stakes are especially high.
Recent developments clearly show this. India has resumed purchasing Iranian LPG for the first time since 2018, a move that signals both a pragmatic recalibration and the severity of the existing shortage. Simultaneously, reports indicate that Indian refiners are set to buy about 60 million barrels of Russian oil for April, continuing the pattern that has defined India’s energy strategy since the Ukraine conflict disrupted traditional supply lines. These are not isolated transactions; They are symptoms of a deeper strategic flow.
At the core of the issue is a structural weakness: India’s excessive dependence on imported energy. About 85% of its crude oil needs are met through imports, making it vulnerable to external shocks. This dependence is compounded by relatively modest strategic petroleum reserves, estimated at around 100 million barrels, compared to the significantly larger reserves maintained by major economies. In an era where energy is a commodity as well as a geopolitical instrument, such asymmetry is untenable.
The comparison with China is instructive, if not sobering. China’s strategic reserves are widely believed to exceed one billion barrels, providing it with a safeguard against instability and a lever in global negotiations. In contrast, India operates with limited buffers, often reacting to crises rather than dealing with them. The need to expand the strategic reserves is no longer a matter of long-term planning but of immediate national priority.
Along with these weaknesses, the rapidly evolving geopolitical scenario is also responsible. The Strait of Hormuz, through which about a fifth of the world’s oil supply passes, has once again emerged as a potential flashpoint. Any disruption here would have cascading effects, not just on oil but also on critical materials like helium, a lesser-known but indispensable resource used in semiconductor manufacturing and advanced computing. About 35% of global helium trade passes through this narrow corridor. A blockade or escalation in the region would therefore impact industries far from traditional energy sectors, underscoring the interconnectedness of modern supply chains.
In this context, India’s energy policy will have to strike a delicate balance between strategic autonomy and geopolitical alignment. The decision to halt Iranian oil imports under US pressure in 2019 remains a controversial chapter. Although compliance with sanctions may have served diplomatic objectives, it also limited India’s supplier base at a time when diversification was essential. The shift to Russian oil, often at discounted rates, has partly reduced costs but has introduced new dependencies and risks, especially in a sanctions-heavy global environment.
However, it would be naive to consider India’s energy plight solely the result of external pressures. Domestic policy choices have also played an important role. Recent decision by the Government of India to reduce excise duty on petrol and diesel. ₹10 reflects an effort to protect consumers from rising global prices. While politically expedient, such measures raise questions about fiscal sustainability and structural reforms. More importantly, they highlight the persistent gap between global crude oil prices and domestic fuel pricing.
This gap between what India pays internationally and what consumers pay at the pump is shaped by a complex interplay of taxes, subsidies and pricing mechanisms. Even when global prices are low, retail prices are often volatile, reducing public confidence and complicating economic planning. In contrast, during price increases, the burden of adjustment falls unevenly on stakeholders, with the government bearing some of the costs and consumers bearing the rest.
However, the broader issue is not pricing but flexibility. India’s current approach to energy security is largely transactional, focused on ensuring supply at the best possible price, rather than strategic. What is needed is a paradigm shift towards energy sovereignty, defined not as autocracy but as the ability to absorb and adapt to external shocks without compromising national interests. Many major measures will have to be taken for such a change.
First, the expansion of strategic petroleum reserves must be accelerated. The existing facilities, while useful, are inadequate for a country of India’s scale and ambition. Public-private partnerships, innovative financing models and strategic global collaboration can help bridge this gap.
Second, supplier diversification must go beyond opportunistic purchasing. Long-term agreements with multiple countries, including those in Africa and Latin America, would reduce excessive dependence on any one region. At the same time, where geopolitically possible, re-engagement with previously sidelined partners should be pursued with practical clarity.
Third, India should invest more aggressively in alternative energy sources. Although significant progress has been made in renewable energy, particularly solar and wind power, the transition is incomplete. Natural gas, green hydrogen and biofuels offer viable pathways to reduce oil dependence, but require sustained policy support and infrastructure development.
Fourth, demand-side measures are essential: efficiency, smart urban design and public transportation can control demand, while electric mobility requires proportionate charging networks and grid preparation.
Ultimately, institutional coordination is necessary. Energy policy in India is divided among several ministries and agencies. A more integrated approach, perhaps through a dedicated Energy Security Council, could enhance coherence and accountability.
The global context adds urgency to these imperatives. Unlike early decades, when oil shocks were largely driven by cartel activities, today’s disruptions are multifaceted. Geopolitical rivalries, political power, climate policies, technological change, and financial markets all interact to shape energy outcomes. The result is a system that is not only unstable but also unpredictable.
In such circumstances, excessive reliance – whether on a single supplier, transit corridor, or policy orientation – ceases to be prudent and instead becomes a strategic risk. Describing India’s position as tied to any one power, be it the US or Russia, obfuscates a much more complex reality. New Delhi has shown remarkable adeptness in balancing competing pressures; Yet strategic mobility must now be underpinned by deep structural capacity.
Therefore, the more relevant question is not whether this moment rivals the oil shocks of the 1970s, but whether India is prepared for a future in which such disruptions are likely to be repeated with greater intensity. The answer, at best, remains unclear.
Recent policy steps such as renewed Iranian LPG purchases, expanded Russian sourcing and calibrated tax interventions underline the willingness to adapt. But adaptation, while necessary, is not sufficient. What is required is foresight: the ability to anticipate dislocations, build durable buffers, and influence outcomes rather than merely absorb their consequences. Energy, in this context, transcends its role as a commodity; It serves as an instrument of power. In a world where supply chains shape strategic alignment, control over energy flows becomes inseparable from the exercise of sovereignty.
Accordingly, India must move from transactional procurement to ex ante governance, placing energy security at the center of statecraft within a framework of strategic autonomy, diversified supply and calibrated engagement. Apart from imports or increasing reserves, this requires foresight, systemic flexibility and technological change in line with pricing, fiscal policy and long-term priorities. As energy interdependence becomes more asymmetric and geopolitically evolving, India’s strength will lie in turning vulnerabilities into advantages, absorbing shocks coherently and transforming episodic responses into sustained preparedness.
This article is written by New Delhi-based political analyst and columnist Amal Chandra.
