A lingering reliance on Gulf energy amid India’s renewables push

India is one of the many Asian nations whose energy supplies are at risk from the current crisis. About half of the nation's fossil-fuel imports transit the Strait of Hormuz in tankers departing Saudi oil terminals and Qatari LNG facilities. We've highlighted the affected sources of supply in purple on this chart. (The proportion was even higher before India began buying discounted Russian crude in 2022.)

India's energy ecosystem is interconnected, as our second chart shows -- meaning India's electricity market is still likely to see knock-on effects despite the dominance of domestic and imported coal supplies that don't transit Hormuz.

Power prices, crude-oil and coal benchmarks all tend to track each other.

In this context, India's decision to prioritize renewables over coal-fired power generation since 2017 looks prescient.

However, even as solar and wind capacity has surged, these power sources remain intermittent versus the dependability of coal. Its share of actual power generation has barely retreated since 2019 -- remaining above 70%.

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