5) With reference to India’s energy security in the context of international sanctions, consider the following:
- Strategic Petroleum Reserves
- Diversification of crude-oil suppliers
- Local-currency settlement mechanisms
- Indigenous maritime insurance capacity
- Expansion of renewable energy and alternative fuels
How many of the above can contribute to reducing India’s vulnerability to external disruptions in energy trade?
Answer: (d) All five
Explanation: All five measures address different dimensions of India’s external energy vulnerability.
Strategic Petroleum Reserves provide a physical buffer against temporary disruptions in crude supplies.
Supplier diversification reduces excessive dependence on any single country or source of crude oil.
Local-currency settlement mechanisms can reduce exposure to disruptions arising from dependence on dollar-based financial channels.
Domestic maritime insurance capacity can strengthen resilience where sanctions or geopolitical tensions affect access to international shipping insurance.
Finally, renewable energy, green hydrogen, biofuels and other alternatives can reduce India’s structural dependence on imported fossil fuels over the longer term.
The important conceptual point is that energy security is not merely about obtaining crude oil. In the source, it is discussed through the wider dimensions of availability, affordability, accessibility and sustainability. Financial payments, shipping, insurance, strategic stocks and domestic energy substitution can therefore all affect energy security.
