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What US Shale Oil Imports Mean for India
India has imported its first shipment of shale oil from the United States, the fastest-growing oil producer in recent years. This is a significant step for India as it will now be less dependent on oil from West Asia, opening access to more risk-free oil and better prices. Yet concerns remain. India is consuming oil at a fast rate, while domestic production is falling. It will continue to be dependent on oil imports for its energy security, and will have to further diversify its sources of oil imports.
The docking of the first shipment of shale oil from the United States (US) at Paradip port, Odisha is a significant landmark in India’s quest for cheap oil. This indicates that India, which has heavily relied on imports of oil from West Asia for decades, has finally realised that despite its best efforts to diversify its oil imports, by tapping new regions like South America and Africa and investing in oil assets across the globe, it has slipped on this front and there is still an urgent need to tap newer markets like the US, whose surging shale oil production offers new opportunities.
Tapping into the US shale oil market, though still a small niche market, offers the largest long-term potential, will ensure that India would be able to tap into yet another new buoyant oil source. Such a step will not only help it retain its bargaining power with existing suppliers, but will also enable it to keep import prices at lower levels.
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