Geopolitical headwinds threaten '25 oil imports

However, copious supplies and falling rates cap concerns

- S DINAKAR

India's growing imports of crude oil, a looming threat to the country's energy security, may face a turbulent 2025 amid geopolitical winds emerging from the new Donald Trump administration, Russian President Vladimir Putin's manoeuvres in Ukraine, tightening sanctions on Iran's oil, and escalating Houthi rebel attacks, industry executives said.

However, copious oil supplies amid growing global output and slowing Chinese oil consumption will put India in a better bargaining position with Gulf suppliers, who are in talks to renew annual crude supply contracts.

As a result, the crude import bill, a growing strain on the country's trade deficit, may ease in 2025 as crude prices are expected to average lower on the year at $75 per barrel.

Meanwhile, senior refining executives said the ratio of ethanol in the country's fuel mix may increase by 5 percentage points.

According to rating agency ICRA, no major refining capacity additions are expected in 2025, barring a gradual commissioning of Hindustan Petroleum Corporation's (HPCL's) 180,000 barrels-per-day refinery in Barmer, Rajasthan.

Petrol constitutes around 17 per cent of the country's fuel use mix and is expected to grow at over 5 per cent annually—higher ethanol blending will compensate for petrol's growth, putting a lid on oil imports, executives said.