India's Crude Oil Output Falls for Third Straight Year

Key facts

• India's crude oil output decreased by 3% in the 2025/2026 fiscal year.
• This is the third consecutive year of declining domestic crude oil production.
• The decline is attributed to the natural depletion of mature oil and gas fields.
• The government has launched a National Offshore Exploration Scheme with significant financial support.
• The scheme aims to boost offshore exploration and reduce India's high dependence on crude oil imports.

India's crude oil production has fallen for the third consecutive financial year, with output decreasing by 3% in 2025/2026. The government attributes this decline primarily to the natural depletion of mature oil and gas fields. State-owned Oil and Natural Gas Corporation (ONGC) managed to limit its own annual decline to approximately 2% through the implementation of Enhanced Oil Recovery (EOR) and Improved Oil Recovery (IOR) techniques.

To address this trend and reduce its significant reliance on imports, which account for up to 90% of its crude oil needs, India has launched an ambitious offshore exploration initiative. The National Offshore Exploration Scheme, backed by $8.8 billion in government support through fiscal year 2030-31, aims to unlock the country's deepwater and ultra-deepwater hydrocarbon potential in regions like Krishna-Godavari and Mahanadi.

As part of this program, the government will offer financial assistance of up to 50% of the cost for drilling deepwater exploration wells. This risk-sharing approach is designed to encourage investment and accelerate the development of offshore resources, recognizing the high-cost and high-risk nature of such ventures. Additionally, India is planning to build new storage sites to bolster its energy security and resilience against supply shocks.