India’s Crude Oil Production Declines for 11th Straight Year Amid High Import Dependence
Highlighting the growing dependence on imports, India’s crude oil production has experienced a decline for the eleventh consecutive year in 2025-26. Natural gas output has also fallen for the second year in a row, primarily due to the depletion of older fields and a lack of significant new discoveries. As a result, reliance on imports has surged, reaching 89% for crude oil and 51% for natural gas. The ongoing US-Iran conflict has further exacerbated this vulnerability, leading to increased costs and supply shortages for refiners.
Declining Production Trends
India’s crude oil production has seen a notable decrease, dropping by 2.5% to 28 million metric tonnes in the fiscal year 2025-26. This decline marks a cumulative reduction of 22% since 2014-15, when the downward trend began. Similarly, natural gas production has decreased by 3.7%, totaling 34,776 million metric standard cubic meters during the same period. Over a longer timeframe, natural gas output has contracted significantly, falling 40% from 47,555 million metric standard cubic meters in 2011-12 to 28,672 million metric standard cubic meters in 2020-21. This decline was notably influenced by a drop in output from the KG-D6 field operated by Reliance Industries.
Despite a brief resurgence in production following the commissioning of new fields in 2021-22, output has since stabilized. The combination of declining yields from legacy fields operated by Oil and Natural Gas Corporation (ONGC) and the lack of new discoveries has continued to impact overall production levels. Industry experts attribute the ongoing decline to the absence of significant new finds over the past decade, emphasizing that without fresh discoveries, maintaining production becomes increasingly difficult.
Challenges in Exploration and Investment
The Indian government has implemented various reforms aimed at boosting exploration activities in the oil and gas sector. Initiatives include establishing a national geological data repository, simplifying regulatory and environmental approvals, and introducing fiscal frameworks that offer a larger share of returns to explorers. However, despite these efforts, global oil companies have shown limited interest in participating in India’s exploration landscape. Most licensing rounds over the past decade have been dominated by domestic public sector firms, limiting the influx of foreign capital and advanced technology.
Industry executives have pointed out that companies have not acted swiftly enough to commercialize identified resources. The slow pace of development has hindered efforts to sustain production levels. Additionally, concerns regarding policy unpredictability and modest resource prospects have discouraged potential investments in the sector. Experts believe that revitalizing oil and gas production in India will necessitate substantial new investments in exploration and development.
Future Outlook and Strategic Needs
The current state of India’s oil and gas production raises significant concerns about the country’s energy security. With reliance on imports reaching critical levels, the need for strategic planning and investment in domestic production has never been more urgent. Industry insiders stress that without a concerted effort to discover and develop new reserves, India may continue to face challenges in meeting its energy needs.
To address these issues, experts recommend a multi-faceted approach that includes enhancing exploration incentives, fostering partnerships with international oil companies, and streamlining regulatory processes. By creating a more attractive investment climate, India can potentially reverse the declining trends in oil and gas production. The future of the sector hinges on the ability to adapt to changing market dynamics and invest in sustainable practices that ensure long-term energy security for the nation.
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