A resilient energy system is one in which a country can shift suppliers, routes and technologies without suffering disproportionate economic disruption
Energy security is usually understood as the ability of a country to obtain adequate energy at affordable and predictable prices. But in a world of geopolitical tensions, sanctions and trade restrictions, another dimension is becoming equally important: the freedom to choose suppliers.
The issue has acquired fresh significance after the United States enacted legislation giving its President broad authority to impose tariffs of up to 100% on countries purchasing Russian oil and gas. India and China, among the major buyers of Russian crude, could be affected. The legislation is intended to increase economic pressure on Russia, but its consequences could extend beyond the countries directly targeted.
Restrictions on major sources of crude can alter established trade flows, increase competition for alternative supplies and introduce uncertainty into global energy markets. For India, the issue is particularly significant because crude oil remains heavily import-dependent.
Government data put India’s crude oil import dependency at around 88% in 2023-24. Consequently, the ability to source crude from multiple suppliers is not merely a matter of commercial convenience; it is an important component of economic resilience. India’s recent experience illustrates this point.
Over the past decade, its sources of crude have changed considerably in response to sanctions, prices and geopolitical developments. Russian crude became increasingly important after 2022, when discounted Russian supplies became available amid Western restrictions. By July 2026, Russian crude accounted for about 50.8% of India’s oil imports, according to Reuters. This movement demonstrates the importance of retaining flexibility in sourcing.
The significance of such changes lies not simply in the identity of the supplier but in the economics of substitution. When one source becomes unavailable because of sanctions or tariffs, importers must seek alternatives. Those alternatives may involve higher transportation costs, different grades of crude, longer shipping routes, greater insurance costs or adjustments at refineries. The replacement barrel may, therefore, cost more, even when global oil production has not changed substantially.
This creates a crucial distinction between reducing dependence on one supplier and restricting the ability to choose among suppliers. The former can strengthen energy security; the latter can weaken it. A diversified energy strategy requires access to several markets so that disruptions in one source can be compensated by supplies from another.
Supplier diversification also gives an importing country greater flexibility when prices or geopolitical conditions change.
The problem becomes larger when trade restrictions affect a substantial share of global oil flows. Oil is a globally traded commodity, and barrels displaced from one market do not necessarily disappear. They may be redirected elsewhere, forcing countries to compete for alternative supplies. The resulting adjustment can increase prices and volatility.
Recent disruptions in the Middle East have already pushed Russian crude prices sharply higher, illustrating how geopolitical shocks can rapidly alter energy-market conditions. Such developments highlight an important feature of the international oil market: physical supply and access to supply are not the same thing. A country may have sufficient oil available in the global market but still face higher costs if sanctions, tariffs, shipping restrictions or insurance constraints prevent it from accessing particular suppliers. Energy security, therefore, depends not only on the quantity of crude available but also on its accessibility and affordability.
For oil importing developing economies, such shocks can have particularly broad consequences. Higher crude prices raise transportation and production costs, increase inflationary pressures and worsen the import bill. Governments may then face difficult choices between protecting consumers, controlling inflation and maintaining fiscal stability. Businesses, meanwhile, confront higher input costs and greater uncertainty, which can discourage investment.
There is also a wider risk. If geopolitical considerations increasingly determine where countries can purchase energy, the international oil market could become more fragmented. Instead of crude moving primarily toward its most efficient commercial destination, trade flows could increasingly be shaped by political restrictions. Such fragmentation would impose additional costs through longer supply chains, higher insurance premiums, duplicated infrastructure and the need for larger strategic reserves.
At the same time, the security rationale behind sanctions cannot simply be dismissed. Governments may seek to reduce revenues available to states involved in conflicts or respond to national security concerns. From that perspective, restrictions on energy trade can serve objectives beyond conventional economic efficiency. The important point is that such measures involve a trade-off: the economic and energy-security costs imposed on importing countries must be considered alongside their intended strategic benefits.
For India and other major oil importers, the lesson is, therefore, not dependence on any single supplier. It is the importance of maintaining maximum feasible flexibility. That means cultivating relationships with multiple producers, maintaining strategic reserves, investing in refinery flexibility, expanding renewable energy and accelerating improvements in energy efficiency.
For policymakers, this means that energy security should be assessed not only through import volumes but also through the resilience of supply arrangements. Access to alternative suppliers, transport routes and technologies can reduce exposure to sudden disruptions and give economies room to respond when international conditions change.
Energy security ultimately depends on more than having enough oil. It depends on having alternatives when circumstances change. A resilient energy system is one in which a country can shift suppliers, routes and technologies without suffering disproportionate economic disruption. As geopolitical tensions increasingly spill into trade and energy markets, preserving that flexibility will become more important. For oil importing nations, energy security is not simply the assurance of supply; it is the assurance of choice.
(Dr Gulam Goush Ansari is
Assistant Professor of Economics at GITAM School of Humanities and Social Science, GITAM deemed to be University, Visakhapatnam, Andhra Pradesh.)
