It is a well-known fact that India relies heavily on imported energy supply (crude oil, natural gas and coal) as there has been a 370% increase in the energy imports between 2000 to 2023. This import dependence is structural and systemic in nature as neither India is blessed with reserves of such resources in abundance, nor its economic growth machinery can function without energy. This makes India’s Energy Security vulnerable to global supply chain shocks caused by geopolitical tensions, such as the ongoing war in Iran, blockades like the closure of the Strait of Hormuz, sanctions imposed on Russian oil imports, and pandemics such as the COVID-19 outbreak in 2019. This leads to the larger and important question of how important it is to diversify the energy supplier base to new frontiers like Africa and Latin America and what are the strategic and economic trade-offs of such engagement?
India currently has a diversified energy import basket comprising 41 different countries. The Indian governments measure to diversify energy supply imports, looks more like an intentional long term diversification effort and a viable component of India’s Global South-South cooperation policy with countries from Africa and Latin America. This is clearly evident from the reduction in imports from Saudi Arabia, Iraq, Iran, Kuwait and United Arab Emirates over the years. In 2005, these nations collectively accounted for about 70% of India’s oil imports, nevertheless, this share has declined to approximately 40%-45%. However, with respect to LPG, about 90% of India’s LPG supply still comes from West Asia.
These diversification efforts are carried out by the government, public sector undertakings (PSUs) and private refineries in tandem. For example, both the Indian Oil Corporation (IOC) and Hindustan Petroleum (HPCL) have imported crude oil from Angola in 2025 and 2026 respectively. Indian refineries, in February 2025 procured a shipment of Gabon’s Etame crude. Refineries like HPCL-Mittal Energy Limited (HMEL), Reliance Industries (Jamnagar) and Bharat Petroleum Corporation Limited (BPCL) imports Venezuelan Oil as they have the capacity to process the sour and heavy grades like Merey. Whereas, in 2024, BPCL bought its first test crude oil from Argentina and it was followed by the import of 50,000 tonnes of LPG in 2026. The best example of Global South-South Cooperation is the deepening ties between the Indian government and the Brazilian Government. The strategic term contract signed between one of the largest oil producers of Brazil, Petrobras and the India’s Bharat Petroleum Corporation Limited (BPCL) in 2025 shows us that the transition is already in motion. The Brazilian Ambassador to India in February 2026 reiterated that the two-way trade would address both Brazil’s limited refining ability and India’s growing demand for oil imports.
The most significant strategic impact of the diversification of India’s energy import basket, is that it enables it to reduce the overreliance on West Asia. This in turn shall partially mitigate price volatility and supply chain disruptions that arises from the region’s volatile geopolitical environment. To add to this, the diversification of supplier base provides Indian refineries a wider choice of crude blends, thereby, increasing procurement resilience. For instance, the Nigerian Agbami and Usan oil grades are low in sulphur and hence best suited for Indian refineries. However, wider choices do not always translate into refinery compatibility. This is the case with the Venezuelan crude imports as they are high in sulphur content and are more viscous than the Russian imports. But this can be countered if it is procured by certain complex and old refineries that have the capacity to refine them.
Also, the current imports from Venezuela cost a premium when compared to the Russian discounted oil. Likewise, the recent purchase of crude from Angola in premium ($15/bbl. above dated Brent) by HPCL is not feasible long term. Factoring this with the increased freight cost due to greater geographic distance between India and West Africa or India and Latin America, then the economics of cost negates the strategic gains made. One way to offset the increased freight cost is through bulk shipping and investing in port infrastructure. With respect to the West African region, the choice of transit route can be made depending on the scale, geopolitical situations, freight cost and economies of demand and necessity. This is possible as the region can be connected by either the traditional Cape of Good Hope route or the Gibraltar à Mediterranean à Suez Canal à Arabian Sea route. Thus, diversification of energy import base, provides us with limited but adequate wiggle room in case of geopolitical disruptions but they come with some economic cost.
However, the major cause of concern while importing from countries in Africa and Latin America are the inherent instability in their domestic political and security environment. These include, inconsistent foreign policy as a result of domestic political changes (For instance, AMLO’s insistence on domestic energy sovereignty in Mexico), maritime security challenges such as piracy threats in the Gulf of Guinea, and nationalization of foreign investments under the policy of resource nationalisation as witnessed in Venezuela in 2007. Coupled with the role of major powers such as US, UK, France and Russia play in influencing the domestic and foreign policy of these African and Latin American states through sanctions, aid leverage, political intervention and trade deals makes the region volatile. Similarly, given India’s interdependence with global economies, such interventions and policies have direct consequences on India’s policy options and choices, particularly in critical import dependent sectors such as energy.
This proves that India has to pursue a diversified energy import strategy to counter overreliance on a single region or a particular country and it is where Africa and Latin America can act as alternatives. However, given the volatility that emerges as a result of global geopolitical interdependence and considering the economics of cost, the viable long-term solutions to ensure India’s resilience and to enhance its strategic autonomy with respect to its energy sector are diversification of source of energy mix and increased investment in the domestic exploration sector. It is in the diversification of source of energy mix that both Africa and Latin American countries can once again play a vital role and this shall be discussed in the upcoming weeks.
Very effective and informative. Much impressed.