ADDRESSING THE CHALLENGE OF ENERGY SECURITY

1.1 Recent changes in the global oil market, and the unprecedented price increase of oil exceeding US $ 50 some weeks ago raises major questions on the security of oil supply today and in the future. If the projections of the International Energy Agency (IEA) are to be taken into account, then the world could see the global oil market exhibiting sudden changes in price and instability in supply for a variety of reasons. The projections of the IEA clearly indicate that most of the increase in production capacity that would be needed upto 2030 would come from OPEC nations, mainly in the middle-east. It also highlights the fact that the dependence of oil importing regions on a small number of OPEC producers and Russia will increase the market dominance of those countries and their ability to impose higher prices. India would be particularly vulnerable in this regard, given that demand for oil is likely to grow from 2.5 million barrels per day (mbd) in 2002 to 5.6 mbd in 2030. India, therefore, has to look at a range of measures by which security of supply of energy can be which are ensured consistent with the objectives of healthy economic growth that is essential to wipe out poverty in this country, and meeting the aspirations of the people