New Delhi, June 18 (IANS): Despite the West Asia crisis disrupting oil and gas flows, India is maintaining its energy security through diversified supply chains, strong domestic coal resources, and expanding digital infrastructure, according to S&P Global Energy’s latest report.

S&P notes that Indian refiners are strategically mitigating shipping risks around the Strait of Hormuz. However, the report advises that India must shift from a standard procurement-based approach to a more aggressive long-term energy security strategy.

The West Asia war risks and soaring freight rates have pushed coal prices up by 30 to 40 per cent. Despite global volatility, India’s increased domestic coal production and stable power grid have successfully protected the country from worse shocks. This has allowed India to balance its transition to renewables.

The report said coal continues to serve as a reliable and cost-effective cornerstone of India’s energy system, particularly in an increasingly uncertain global environment. For India’s power sector, the situation has remained relatively stable due to its lower dependence on liquefied natural gas (LNG) imports and a push for domestic coal production, which has strengthened baseline energy security.

It further states that rising artificial intelligence demands are pushing “Big Tech” to heavily procure clean energy, positioning India as a global hub for data centres even amid global market volatility.

The report also points out that while India’s near-term response to the Middle East turmoil has shielded it from severe disruptions, analysts advise transitioning from basic procurement-based strategies to genuine energy security. This includes securing alternative supply routes and addressing structural vulnerabilities in LPG sourcing.

“Nevertheless, domestic fuel security has largely been protected: India’s oil ministry says inventories provide more than adequate coverage for 76-80 days of crude and refined products available in the country,” S&P said.

“However, India has not been entirely insulated from global disruptions. The conflict has contributed to a sharp rise in prices of imported coal and freight costs, which has translated into higher marginal power prices in wholesale electricity markets,” the report added.

–IANS

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