India eyes oil exploration expansion after Middle East war shortages

After months of turbulence triggered by conflict in the Middle East and intermittent curbs at the Strait of Hormuz, India is accelerating a sweeping push to find more oil and gas at home. The government’s new offshore drive, framed under the “Samudra Manthan” initiative, opens vast tracts of uncharted acreage to bidders and channels billions of dollars into deepwater and ultra-deepwater exploration to shore up energy security.

A crisis that reset priorities

Restrictions on a key Gulf chokepoint during the United States–Iran confrontation choked supplies and fueled price spikes for a nation that imports the bulk of its crude and liquefied petroleum gas. With a temporary pause in hostilities easing the bottleneck and domestic price controls gradually unwinding, New Delhi is treating the episode as a wake-up call rather than a one-off shock—and doubling down on domestic exploration to reduce exposure to geopolitics.

Bidding round and the scale of the gap

Officials say roughly 250,000 square kilometres of largely unexplored offshore blocks will be offered to companies in the coming round—one of the country’s most ambitious releases of acreage to date. Despite periodic discovery successes, India remains a modest producer by global standards: domestic crude output in 2025–2026 was 25.98 million metric tonnes, covering only about 10 percent of national demand. That is roughly 522,000 barrels per day, well below the just-over-900,000 barrels per day peak recorded in 2011.

The near-term goal is to reverse decline and unlock new resources, particularly offshore. The government has signaled a $10 billion exploration and production program and a longer-term plan to progressively open much larger frontier zones for survey and drilling.

Diversifying risk, pragmatically

India navigated the crunch by widening its import basket—from 27 to 41 supplier countries—bringing in more barrels from Iran and Venezuela when possible, stepping up purchases from Russia, and tapping several African producers. The strategy drew criticism in Western capitals, but officials frame it as pragmatic risk management in a volatile market: diversify supply, keep prices in check, and protect domestic growth.

Where the drill bit turns next

Onshore and shallow-water stalwarts—Mumbai Offshore, Rajasthan, Gujarat, and Assam—remain core to output. The next frontier lies farther seaward, especially around the Andaman and Nicobar arc. Geologists note the Andaman Basin shares traits with prolific Southeast Asian petroleum systems. A flare test from a recent exploratory well highlighted the basin’s potential, and a slate of deepwater and ultra-deepwater wells is being prepared across multiple offshore provinces.

To compress timelines and de-risk operations, India is tapping the experience of deepwater specialists, with technical collaborations involving companies such as Petrobras, TotalEnergies, BP, Shell, and ExxonMobil. The intent is clear: accelerate data acquisition, apply advanced imaging and drilling techniques, and move promising structures toward appraisal swiftly.

Big infrastructure, bigger questions

The strategic pivot offshore dovetails with a parallel buildout in the Andaman Sea: a planned $9 billion Great Nicobar Island development that includes a megaport, airport, and a new urban hub. Proponents argue the project would anchor logistics and strengthen maritime posture. Yet the islands are ecologically fragile—blanketed by old-growth forests and home to Indigenous communities—raising questions about cumulative impacts when paired with a vigorous offshore exploration campaign.

From an ecological and renewable-energy lens, the challenge is to ensure exploration does not outpace environmental stewardship. That means rigorous, transparent impact assessments; careful siting away from sensitive habitats; strict spill prevention and methane control; and decommissioning funds set aside from the start. With robust safeguards, the country can reduce import risk while minimizing harm to biodiversity-rich waters.

Mission mode, pre- and post-crisis

The current momentum builds on plans unveiled before the Gulf crisis. In August 2025, the government launched the “Samudra Manthan” mission—short for a national deepwater exploration push—to accelerate the hunt for subsurface oil and gas offshore. The recent shock sharpened that intent, aligning budget allocations and permitting to move faster while global markets remain jittery.

Demand is racing ahead

India’s energy appetite is climbing several times faster than the global average. Oil consumption rose from around 5 million barrels per day in 2021 to about 5.6 million barrels per day and is widely expected to edge toward 6 million barrels per day soon, reflecting robust economic activity and rising incomes. Even as wind, solar, nuclear, and biofuels expand, liquid fuels still power freight, aviation, and much of industry—creating a near-term imperative to secure affordable supply.

The climate balance

New Delhi says the exploration surge can coexist with its pledge to reach net-zero emissions by 2070. The policy track runs on two rails: push hard on domestic fossil output to temper import risk and price shocks, while simultaneously scaling clean energy, electrifying transport, blending petrol with ethanol, and driving efficiency. Whether that balance holds will depend on how quickly renewables plus storage can displace oil in transport and how stringently the upstream sector manages emissions and ecological impacts.

What to watch next

• Results of the 250,000 sq km offshore bidding round, including commitments to drill and data acquisition timelines.
• Progress on deepwater partnerships and the pace of seismic surveys and appraisal wells in the Andaman Basin.
• Environmental safeguards around offshore blocks and the Great Nicobar buildout, especially protections for forests, marine life, and Indigenous rights.
• Policy signals on methane control, flaring limits, and decommissioning liabilities in new contracts.
• How fast clean power, green hydrogen, and electrified mobility grow to curb oil demand growth through the 2030s.

India’s response to wartime shortages is reshaping its upstream map. The ultimate test will be delivering energy security gains without locking in environmental costs—channeling today’s crisis-fueled urgency into a measured, future-proof energy transition.