Crude oil production, which accounts for about a quarter of India’s total imports, has fallen 3% per year over the past seven years, ending fiscal 2024.
Due to a decline in production and increased consumption, India’s import dependence increased from 86% in 2017 to 89% in 2014.
These findings are part of the Indian Energy Scenario FY24 report, which provides detailed data on procurement, production and consumption in India. It will be announced by the Energy Efficiency Bureau (BEE) under the Ministry of Electricity.
In fiscal 2012, India’s total primary energy supply was 910 mtoe (equivalent to 1 million tonnes of oil), 60% from coal, 28% from oil, 7% from gas, and 5% from non-fossil energy sources.
Decline in production
“In 2004, domestic oil production was 29.4 million tonnes (MT), a significant decrease from 36 MT in 2017, down at an annual rate of 3%,” the report noted.
The decline in crude oil production is attributed to several factors, including natural depletion of old lateral plaques and marginal limits, accessibility and technical challenges in certain reservoirs, and disruption in on-site activities.
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To arrest this, the government has implemented several long-term and short-term initiatives, including Hydrocarbon Exploration and Licensing Policy (HELP) 2019, guiding appropriate technology in select areas, and monetizing small and marginal discoveries on land through service contracts and outsourcing.
State-owned companies ONGC and Oil India (Oil) donated approximately 65% and 11% between 2023 and 24, respectively. The remaining 24% of crude oil is produced through production sharing agreements (PSCs) or revenue sharing agreements (RSCs) regimes.
In a January 2025 report, the Fitch rating “expects India’s crude production will fall by 2-3% (7m FY25: -3%). This fall reflects the ongoing struggle for companies like ONGC to arrest natural production declines in mature sectors through technology investment, and utilize recovery and isolated reservoirs.”
However, as production increases in offshore fields in ONGC in the KG Basin and individually owned fields, production should grow at a single-digit lower rate in FY2026.
The estimated balanced and recoverable crude oil reserves for India in the country were 671.4 MT as of April 1, 2024, reflecting a 0.3% increase of 669.47 MT from the previous year’s reserves.
Rising imports
Fitch’s valuation hopes India’s dependence on crude oil imports will continue to increase in the short term.
The world’s third largest crude oil importer sourced 234 mt of goods in 2024. Imports in the country accounted for 86% of crude oil supply in 2017, rising to 89% by 2024 despite experiencing a temporary decline during the Covid-19 pandemic in 2024 and 2022.
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Historically, India has relied on the Middle East to supply crude oil. However, the share of total crude oil imports has decreased from 64% in 2018 to 46% in 2014. In contrast, imports from Eurasia, primarily Russia, jumped from 3% in 2018 to 39% in 2004.
Higher imports reflect an increase in national use of sophisticated petroleum products. India’s refinery capacity is 256.8 million tonnes per year (MTPA) as of April 1, 2024, making it the fourth largest refinery in the world after the US, China and Russia.
Petroleum product production increased from 244 MT in 2017 to 276 MT in 2014, an annual increase of 2% over the past seven years.
Petroleum products imports increased by 4% each year, but exports fell by 1% due to rising domestic demand at the same time.
