The Evolving Global Energy Transition Landscape

The global energy landscape in 2024 is defined by record-high demand coupled with unprecedented growth in low-emission energy sources. Renewables and nuclear energy are increasingly meeting the majority of the incremental electricity demand, signalling a gradual structural shift.

Energy Mix Trends

• Persistent reliance on fossil fuels: Fossil fuels continue to dominate global primary energy supply, accounting for nearly 80–86%. However, their role is gradually declining in electricity generation, where cleaner alternatives are gaining ground.
• Oil, coal, and gas dynamics: Oil remains the largest energy source, though its share fell below 30% in 2024. Coal consumption reached a historic high in absolute terms, largely driven by power demand in China and India. Natural gas recorded a growth rate of 2.7% in 2024, functioning as a transitional fuel in the energy mix.

Low-Emission Energy Growth

• Renewables and nuclear expansion: Renewables and nuclear energy together exceeded 40% of global electricity generation for the first time in 2024, reflecting their increasing significance in the power sector.
• Solar and nuclear developments: Solar photovoltaic energy emerged as the fastest-growing technology, contributing nearly 80% of new renewable capacity additions. Nuclear energy also experienced renewed growth, with a 4% increase in generation, supported by new reactor developments primarily in China and Russia.

Regional Energy Dynamics

• China and India as key drivers: China leads globally in renewable deployment, accounting for 60% of new capacity additions, while also remaining the largest consumer of coal at 58% of global usage. India continues to be the second-largest contributor to global energy demand growth, with a focus on achieving 500 GW of non-fossil capacity by 2030.
• Advanced economies’ demand recovery: The United States and the European Union witnessed a revival in energy demand in 2024 after a period of decline, driven mainly by industrial recovery and increasing data centre requirements.

India’s Crude Oil Dependence

• High import dependence and vulnerability: India’s crude oil imports have reached record levels, with dependence exceeding 89% by early 2026. This high reliance exposes the economy to global price volatility and geopolitical disruptions, particularly in strategic transit routes such as the Strait of Hormuz.
• Rising import volumes and expenditure: India imported around 243–244 million tonnes of crude oil in FY 2024–25, with 206 million tonnes imported between April 2025 and January 2026. The total import bill stood at approximately $137 billion.
• Increasing dependence on foreign sources: Import dependence rose to 89.1% by March 2025, reflecting a steady increase from the previous year’s 87.7%.

Diversification Strategy

• Dominance of Russia and the Middle East: Russia remained the largest supplier through most of 2025, accounting for up to 35–40% of imports, though its share declined to 24% by December 2025. Iraq consistently contributed 20–23%, while Saudi Arabia maintained a stable share of 11–18%.
• Emergence of alternative suppliers: Imports from the United States increased significantly, rising by over 50% in early 2025 as part of diversification efforts. Additional suppliers include the UAE, Brazil, Nigeria, and Angola.

Balancing Security and Supply

• Route diversification and geopolitical pressures: India has reduced reliance on the Strait of Hormuz, with about 70% of imports now routed through alternative pathways. Simultaneously, external pressures, particularly from the United States regarding Russian oil purchases, continue to shape sourcing strategies.
• Domestic production constraints: Domestic crude production remains stagnant at approximately 28 million tonnes annually, insufficient to match the 7.9% growth in auto-fuel consumption.