India Oil & Gas Market Key Takeaways

• The India Oil & Gas Market was valued at USD 350 billion in 2025, reached USD 376 billion in 2026, and is projected to reach USD 531 billion by 2032.
• The industry is projected to witness steady growth at a 5.92% CAGR during 2026–2032.
• Oil dominates the product type segment with a 71% share.
• Crude oil accounts for 58% of the hydrocarbon type segment.
• West India leads geographically with a 39.0% market share.
• The industry is moderately consolidated, with the top five players collectively accounting for 67% of the market.

India Oil & Gas Market Size and Outlook

The oil and gas market in India stood at USD 350 Billion in 2025, to USD 376 Billion in 2026 and is projected to reach USD 531 Billion by 2032, expanding at a CAGR of 5.92% during the 2026–2032 forecast period, supported by upstream regulatory reform and rising domestic hydrocarbon demand.

The government has accelerated upstream sector development through landmark policy reforms, including, the Oilfields (Regulation and Development) Amendment Act, 2025, along with the Petroleum and Natural Gas Rules, 2025, which modernizes the India's exploration licensing framework, while the Ministry of Petroleum & Natural Gas confirmed that blocks covering over 3.78 lakh sq. km have been awarded under the Hydrocarbon Exploration Licensing Policy, attracting committed investments of approximately USD 4.36 billion. Additionally, the Petroleum and Natural Gas Regulatory Board authorized a 34,233 km natural gas pipeline network as of March 2025 to build a national gas grid.

On the demand side, industrial expansion remains the primary growth catalyst, with industrial users expected to account for 40% of incremental natural gas demand growth, alongside residential city gas distribution and transport-linked CNG adoption. Moreover, the government's target to raise natural gas's share in the energy mix from 6% to 15% by 2030 is reinforcing pipeline and CGD network expansion nationwide.

Company-led initiatives are further strengthening supply-side capacity. For example, ONGC initiated over 45 exploration and development wells in early 2025, while the 10th Open Acreage Licensing Policy round, launched in February 2025, offered 25 blocks spanning 1,91,986 sq. km for competitive bidding.

Sustained policy momentum, planned infrastructure investment up to USD 410 billion by 2035, and expanding refining and pipeline capacity are together positioning the sector for steady long-term expansion through the forecast period.

India Oil & Gas Market Key Indicators

• India’s Ministry of Petroleum & Natural Gas reported that average per capita LPG consumption reached approximately 4.85 refills per household in FY 2025–26. The increase reflects growing adoption of clean cooking fuel across rural, semi-urban, and urban households, supported by improved LPG access, government subsidies, and greater awareness, while indicating a gradual shift away from traditional biomass fuels.
• India’s Ministry of Petroleum & Natural Gas reported that ethanol blending in petrol reached 19.24% during Ethanol Supply Year 2024–25. The higher blending rate reduces pure petrol demand and crude oil import dependence while supporting energy diversification. It also strengthens India’s biofuel supply chain by increasing demand for feedstocks such as sugarcane and maize, enhancing energy security and sustainability.
• The Ministry of Petroleum & Natural Gas reported that over 90,000 fuel retail outlets were enabled with digital payment systems in 2025 through nearly 2.71 lakh POS terminals, significantly improving transaction speed and convenience. This digital infrastructure upgrade has enhanced customer experience at fuel stations, reduced cash handling, and improved operational efficiency, thereby supporting steady growth in retail fuel sales across the country.
• India’s Ministry of Petroleum & Natural Gas confirmed that the country’s Strategic Petroleum Reserves have a total capacity of 5.33 million metric tonnes of crude oil. These reserves strengthen energy security by buffering against global supply disruptions and sudden crude price shocks, reducing India’s vulnerability to international market volatility and ensuring stable fuel availability during emergencies.

Geopolitical Impact on the Indian Oil and Gas Market

Global Crude Oil Price Exposure: Geopolitical disruptions can increase global crude oil prices, raising India's import expenditure, crude procurement costs, and refinery input costs. India remains highly dependent on imported crude, with crude oil import dependency reaching 87.7% in FY2023–24 and increasing to 88.2% during April–September FY2024–25, according to the Petroleum Planning & Analysis Cell (PPAC). Higher exposure to international crude prices makes Indian refiners vulnerable to geopolitical supply disruptions, which can increase crude acquisition costs and place pressure on refining margins and downstream fuel-price stability.

Crude Oil Import and Supplier Concentration: India's high dependence on imported crude increases its exposure to disruptions affecting major producing regions and suppliers. Russia became India's largest crude supplier in recent years, while Middle Eastern suppliers remain strategically important. Geopolitical disruptions in the Gulf have further altered India's sourcing mix. In July 2026, Russian crude accounted for approximately 50.8% of India's crude imports, equivalent to around 2.47 million barrels per day, as Indian refiners increased purchases from Russia amid disruptions to Middle Eastern supplies. Although access to Russian crude provides an alternative supply source, increasing concentration in a single supplier also creates exposure to sanctions, trade restrictions, logistical constraints, and geopolitical developments affecting Russian exports.

Maritime Chokepoint and Freight Exposure: India's reliance on seaborne crude imports makes maritime security a critical factor in oil procurement. The Strait of Hormuz carried an average of 20.9 million barrels per day of total oil flows in 1H2025, including 14.7 million barrels per day of crude oil and condensate, with approximately 89% of these crude and condensate flows destined for Asian markets. The disruption intensified in 2026: EIA data show Hormuz oil flows declining from 21.6 million barrels per day in 4Q2025 to 14.9 million barrels per day in 1Q2026 and 4.9 million barrels per day in 2Q2026, while crude and condensate flows fell to approximately 3.7 million barrels per day in 2Q2026. These disruptions can increase voyage times, vessel-risk premiums, insurance costs, and landed crude costs for Indian refiners. Indian refiners have already rerouted shipments and shifted toward delivered cargoes in response to security risks around the Red Sea and Strait of Hormuz.

Natural Gas and LNG Supply Exposure: Geopolitical disruptions also affect India's natural gas market through LNG supply and maritime transportation risks. India's LNG import dependency increased from 46.4% in FY2023–24 to 51.5% during April–September FY2024–25, highlighting the country's growing reliance on international LNG supplies. The Strait of Hormuz is particularly important for LNG trade, carrying approximately 11.4 billion cubic feet per day of LNG in 1H2025, equivalent to more than one-fifth of global LNG trade. Disruptions to LNG shipping can therefore increase procurement costs and create supply uncertainty for India's power generation, fertilizer, city-gas, and industrial sectors.

Supply Diversification and Procurement Flexibility: Geopolitical disruptions are encouraging Indian refiners and energy companies to broaden their sourcing strategies and increase procurement flexibility. In 2026, Indian refiners increased purchases from Russia and other alternative suppliers as Middle Eastern supplies were disrupted, while Indian Oil also increased its reliance on spot crude purchases to secure supply. India is also pursuing alternative LPG supply arrangements, including a proposed Indian Oil agreement with Algeria's Sonatrach for LPG imports beginning in 2027, alongside efforts to increase U.S. LPG sourcing. These developments indicate that geopolitical volatility is encouraging greater supplier diversification and procurement flexibility rather than reliance on a fixed regional supply base.

Overall, geopolitical risks are increasing supply, pricing, and logistics uncertainty across India's oil and gas market. High crude and LNG import dependence, changing supplier concentration, disruption of the Strait of Hormuz and Red Sea routes, and higher shipping and insurance risks can raise landed energy costs and pressure refinery and downstream margins. At the same time, these disruptions are encouraging Indian energy companies to diversify suppliers, increase procurement flexibility, and strengthen alternative supply arrangements, supporting greater resilience in the country's oil and gas supply chain.

India Oil & Gas Market Scope

India Oil & Gas Market Growth Drivers

Scaling Refining Capacity to Power India’s Rising Petroleum Demand

The Ministry of Petroleum & Natural Gas reported that India’s refining capacity increased from 215.1 million metric tonnes per annum (MMTPA) in 2014 to 256.8 MMTPA by 2024, reflecting steady expansion in processing infrastructure aligned with growing domestic demand for petrol, diesel, and LPG across transport, industrial, and residential sectors. This capacity expansion plays a key role in the India oil and gas market by ensuring that increasing upstream crude oil availability is efficiently converted into high-value downstream petroleum products at scale.

Domestic consumption of petroleum products reached 233.3 MMTPA in FY 2023–24, indicating strong end-use demand supported by transportation growth, industrial activity, and household energy requirements. During the same period, Gross Value Added (GVA) from coke and refined petroleum manufacturing rose from USD 18.8 billion in 2012–13 to USD 25.5 billion in 2022–23, highlighting the sector’s increasing economic contribution. The Ministry further projects that India’s refining capacity will expand to 309.5 MMTPA by 2028, strengthening long-term supply readiness.

At present, India’s capacity exceeds domestic consumption, positioning the country as a net exporter of refined petroleum products. This surplus capacity provides refiners with an opportunity to serve both strong domestic demand and international markets, while also offering a first-mover advantage to new capacity additions ahead of 2028, before additional supply enters the sector.

Recent Trends

Accelerating Methane Abatement and Renewables Integration by State-Run Oil and Gas Producers

In the India oil and gas market, methane abatement is emerging as a critical operational and sustainability trend, driven by tightening climate commitments and the rapid deployment of advanced emission monitoring technologies. According to the International Energy Agency’s Global Methane Tracker 2026, methane emissions across South and Southeast Asia’s oil and gas sector are projected to decline by around 10% by 2030 and nearly 20% by 2035 under current policy frameworks. The report further indicates that existing abatement technologies can reduce emissions by more than 50%, with approximately 60% of these reductions achievable at no net cost to producers.

In India, state-owned operators ONGC and Oil India are advancing decarbonization efforts through strategic collaborations with TotalEnergies for the deployment of AUSEA airborne methane detection technology across operated assets. These initiatives support ONGC’s emission reduction targets of 50% by 2027 and 80% by 2030, compared to a 2020 baseline. Both companies are also signatories to the Oil & Gas Decarbonization Charter, reinforcing their commitment to achieving near-zero upstream methane emissions by 2030.

Complementing these initiatives, ONGC’s flaring elimination programme is expected to reduce approximately 1.98 million tonnes of CO₂ equivalent, with an additional 0.53 million tonnes targeted through enhanced fugitive methane leak detection. As satellite-based and airborne monitoring systems transition from pilot deployments to routine operational tools, methane intensity reporting is increasingly becoming a standard performance metric across India’s upstream sector, aligning the industry with global decarbonization benchmarks ahead of the 2030 target horizon.

India Oil & Gas Market Opportunities and Challenges

Rising Crude Oil Import Dependence Accelerating Investment in Domestic Offshore Exploration

India’s growing dependence on imported crude oil is accelerating investment in domestic exploration to strengthen long-term energy security and reduce exposure to global supply risks. Crude oil import dependence increased from 87.8% in FY24 to 88.2% in FY25, highlighting the widening gap between domestic production and rising energy demand. This increasing reliance on imports exposes the country to international crude price volatility, geopolitical disruptions, and higher foreign exchange outflows, while limiting the ability of refiners to cushion domestic fuel prices from global market fluctuations. In addition, India’s proved and probable (2P) oil reserves declined from 450 million metric tonnes in FY22 to 434 million metric tonnes in FY24, reinforcing the need for new resource discoveries.

To address these challenges, ONGC is significantly expanding offshore exploration activities across India’s frontier basins. In February 2026, the company issued a USD 18–20 billion global tender to procure deepwater drilling rigs for exploration in the Andaman, Mahanadi, Saurashtra, Bengal, and Krishna-Godavari basins, targeting ultra-deepwater reserves at depths exceeding 3,000 metres. The contracts include a firm four-year tenure with a one-year extension option, providing long-term opportunities for drilling contractors and technology providers while supporting future domestic production growth and reducing India's long-term dependence on crude oil imports.

Segmentation Insights

Oil Emerges as the Leading Product Type, Capturing 71% of the Market

Oil holds a dominant 71% share of the India oil and gas market by product type, driven by strong demand across transportation, industrial, and residential applications. High-Speed Diesel (HSD) remains the largest contributor, accounting for 41.1% of total petroleum product consumption in FY 2025–26, up from 39.3% in the previous year. Its continued dominance is attributed to its widespread use in road freight transportation, agricultural machinery, construction equipment, and industrial operations, where viable large-scale alternatives remain limited.

India's strong refining capabilities further reinforce the leadership of the oil segment. Indian Oil Corporation Limited became the country's first refiner to receive ISCC CORSIA certification for Sustainable Aviation Fuel (SAF) production at its Panipat Refinery, while Reliance Industries' Jamnagar Refinery, the world's largest single-site refining complex, efficiently processes crude oil into a broad portfolio of petroleum products, enabling economies of scale and competitive production costs.

In addition, Aviation Turbine Fuel (ATF) consumption reached an estimated 9.8 million metric tonnes in FY 2025–26, with its share of total petroleum product consumption increasing from 3.7% to 3.8%, supported by the continued recovery in domestic and international air travel. Combined with sustained demand for diesel, petrol, and LPG, this diversified product portfolio strengthens refinery utilization, supports stable revenue generation, and enhances resilience against demand fluctuations in individual fuel categories over the forecast period. By product type, the market is further segmented into the following sub-categories:

• Oil
• Gas

Crude Oil Maintains Leadership in India's Hydrocarbon Type Segment with a 58% Share

Crude oil accounts for a dominant 58% share of the India oil and gas market by hydrocarbon type, supported by its role as the primary feedstock for the country's expanding refining industry and its critical importance in meeting transportation, industrial, and petrochemical demand. The continued expansion of domestic refining capacity is further strengthening the leadership of this segment.

In April 2026, the Cabinet Committee on Economic Affairs approved a revised investment of USD 9.2 billion for the HPCL Rajasthan Refinery Limited (HRRL) project at Pachpadra, Rajasthan, expanding the integrated refinery and petrochemical complex to 9 MMTPA. Similarly, in October 2025, Bharat Petroleum Corporation Limited (BPCL) and Oil India Limited (OIL) signed a non-binding agreement to jointly develop a 9–12 MMTPA greenfield refinery and petrochemical complex, valued at approximately USD 11 billion, near Ramayapatnam Port in Andhra Pradesh.

On the upstream front, ONGC's crude oil production increased from 19.471 million metric tonnes in FY24 to 19.598 million metric tonnes in FY25, while India imported 243.22 million metric tonnes of crude oil during FY25, reflecting a 3.82% year-on-year increase to meet rising domestic demand. Together, expanding refining investments, steady domestic production, and robust crude import volumes are expected to sustain the dominance of the crude oil segment throughout the forecast period. By hydrocarbon type the market is further segmented into the following sub-categories:

• Crude Oil
• Natural Gas
• LNG
• Shale Gas
• Coal Bed Methane (CBM)
• Tight Gas

India Oil & Gas Market Geographical Analysis

West India accounts for 39% of the India oil and gas market, making it the country's largest regional hub for oil and gas production, refining, LNG imports, and petrochemical operations. The region's leadership is supported by the presence of major offshore hydrocarbon reserves, world-class refining infrastructure, and strategically located ports that facilitate both crude oil imports and petroleum exports.

A key contributor to this dominance is Mumbai High, India's largest offshore oil and gas field. To enhance production from this mature asset, ONGC appointed a bp subsidiary as the technical services provider in January 2025, with the redevelopment programme targeting an increase in crude oil output from 45.47 million metric tonnes to 65.41 million metric tonnes. Complementing this effort, ONGC has committed approximately USD 3.5 billion to expand production across its western offshore assets, including deepwater exploration projects, strengthening the region's upstream production capacity.

The downstream ecosystem further reinforces West India's leadership. In March 2026, Petronet LNG expanded the regasification capacity of its Dahej LNG Terminal in Gujarat from 17.5 MTPA to 22.5 MTPA, enhancing India's LNG import capability. The company also secured a USD 1.4 billion term loan to establish an integrated petrochemical project at Dahej, increasing value addition within the region. Together, expanding upstream production and downstream infrastructure are expected to strengthen West India's position as the country's leading oil and gas hub throughout the forecast period.

India Oil & Gas Market Competitive Landscape

The India oil and gas market is moderately consolidated, with the top five companies—Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation Limited (IOCL), Reliance Industries Limited, Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL)—collectively accounting for approximately 67% of the overall market, supported by their extensive presence across upstream exploration, refining, fuel marketing, pipeline infrastructure, and petrochemical operations.

Major players in the India Oil and Gas Market

• Oil and Natural Gas Corporation (ONGC)
• Indian Oil Corporation Limited (IOCL)
• Reliance Industries Limited
• Bharat Petroleum Corporation Limited (BPCL)
• Hindustan Petroleum Corporation Limited (HPCL)
• GAIL (India) Limited
• Nayara Energy
• Oil India Limited (OIL)
• Cairn Oil & Gas
• Petronet LNG Limited
• Adani Total Gas Limited
• Gujarat Gas Limited
• Indraprastha Gas Limited (IGL)
• Mahanagar Gas Limited (MGL)
• Mangalore Refinery and Petrochemicals Limited (MRPL)
• Engineers India Limited (EIL)
• Gujarat State Petronet Limited (GSPL)
• Others

India Oil & Gas Market News and Recent Developments

2025: GAIL Commissions the Srikakulam–Angul Natural Gas Pipeline

On 16 October 2025, GAIL (India) Limited commissioned the 422-kilometre Srikakulam–Angul Natural Gas Pipeline, extending the national gas grid across Andhra Pradesh and Odisha. The project enhances natural gas transportation capacity, improves connectivity for industrial consumers, and supports the expansion of City Gas Distribution (CGD) networks in eastern India. It also aligns with the government's objective of increasing the share of natural gas in the country's energy mix.

Market Impact Analysis: The commissioning strengthens gas infrastructure in eastern India, improving supply reliability and enabling greater industrial and commercial gas consumption. It is expected to accelerate CGD network expansion, support demand for cleaner fuels, and create long-term growth opportunities for natural gas transmission and downstream distribution across India's oil and gas market.

2026: Cairn Oil & Gas Deploys High-Capacity Drilling Rig in Rajasthan

In February 2026, Cairn Oil & Gas deployed a 2,000-horsepower drilling rig at its Barmer fields under a performance-based agreement with Parker Wellbore. The advanced rig is designed to improve drilling efficiency and support the company's target of increasing production to 300,000 barrels of oil equivalent per day.

Market Impact Analysis: The deployment is expected to accelerate well development, improve recovery rates, and strengthen domestic crude oil production. Enhanced drilling capabilities will support reserve development, increase operational efficiency, and reinforce Rajasthan's position as one of India's most significant onshore hydrocarbons producing regions.

2026: Cairn Oil & Gas Announces USD 11.6 Billion Investment in Rajasthan Operations

In March 2026, Cairn Oil & Gas announced an investment of ₹1 lakh crore (approximately US$11.6 billion) to expand its Rajasthan operations, building on more than ₹1.5 lakh crore already invested in the Barmer–Sanchore basin. The investment will support exploration, production expansion, and infrastructure development across one of India's largest onshore oil-producing regions.

Market Impact Analysis: The investment is expected to strengthen domestic crude oil production, reduce dependence on imports, and enhance upstream capacity. It will also stimulate regional infrastructure development, improve supply security, and reinforce Rajasthan's strategic role in supporting India's long-term oil production and energy security objectives.

2025: European Union Sanctions Nayara Energy's Vadinar Refinery

In July 2025, the European Union included Nayara Energy's 20 MMTPA Vadinar Refinery in its latest sanctions package due to Rosneft's ownership stake. The sanctions restrict exports of refined petroleum products to European markets while limiting access to European banking, insurance, and shipping services.

Market Impact Analysis: The sanctions are expected to accelerate Nayara Energy's diversification toward Asian and African export markets while reshaping regional trade flows. Although export flexibility may be affected, India's strong domestic fuel demand is likely to mitigate operational risks and sustain refinery utilization over the medium term.