ABSTRACT
Structural shifts in the nature of the global oil demand and evolution of spare production capacity have changed global oil fundamentals, impacting oil prices in recent years. This chapter provides a brief overview of these fundamentals and implications for net oil importing countries like India. It analyses India's evolving oil market and recommends key policy measures to enhance the country's energy security. The chapter also provides a brief overview of the nature of the global oil market. After describing the nature and complexity of this market, it emphasizes the continued importance of the Organisation of Petroleum Exporting Countries (OPEC) as supplier to net importing regions like Asia and its implications for energy security. Competing stakeholders for ethanol supply and a lack of political will to resolve domestic ethanol pricing issues continue to constrain India's ethanol blending program. The Indian government's plan to blend 20 per cent of bio diesel with conventional diesel by 2012 is completely off–track.
