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India’s energy security hinges on Gulf, China |
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With Asia set to become the largest consumer of primary energy in two decades, India’s hydrocarbon security policy cannot ignore competition, particularly from China, and its ramifications in the Gulf region, says a new study.
“China is the largest energy consumer in the Asia Pacific and might become one of the world’s largest oil importers after the US and Japan. Thus the Chinese policy is going to be critical in the making of the region’s energy scene and holds the key to regional energy security,” says the study, titled “India’s energy security: The Gulf factor.” The study by Girijesh Pant, head of the Gulf studies programme at the Centre for West Asian and African Studies of Jawaharlal Nehru University (JNU), calls for India to evolve a multi-pronged policy addressing multiple risks. “A country which is importing 70 to 80 percent of hydrocarbon (requirement) inevitably gets exposed to the temper and rhythm of the global market, the regional suppliers and its bilateral linkages with the individual supplier. This involves hedging against the risks associated with the supply and price,” it says.
“In the period when the supply of oil will rapidly diminish, there is a very real and politically relevant possibility that the greatest consumers of oil in East Asia will become competitors. This makes it imperative for India to seriously consider the energy future of its competitors as its own political and energy security is closely related to it.” India’s growing demands for petroleum crude and products have been met through imports from nearly 30 countries, but five nations — Nigeria, Saudi Arabia, the United Arab Emirates, Kuwait and Iran — account for more than 75 percent of the supplies, with Saudi Arabia being the leading supplier with 20 percent of the imports.
“While efforts to diversity sources of oil and gas supplies remain an important energy security strategy, equally important is to consolidate linkage with Gulf countries by weaving in the energy ties into a framework of economic interdependence, raising mutual stakes to hedge against the risk possibility.” The study notes that India currently imports 50 percent of its oil from the Gulf Cooperation Council (GCC) countries and the share is likely to go up. But with the region and its hydrocarbon industry poised to undergo revolutionary changes as they join the global economy, and as financial demands on regional economies grow, the oil trade is likely to be less susceptible to regime change. “This, however, does not discount the uncertainties that a radical political change could create. It may be underlined here that the radicalisation of regional polity is intimately linked with wider West Asian and global polity.
“Of the various factors that contribute to the possible radicalising of the regional polity today is the resentment against US domination in the region. This means, to an extent, scaling down of US engagement from the region could moderate the prospect of radical threat,” it says, but adds that this alone would not minimise the threat.
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