Canada's strategic initiative to significantly increase energy exports to India represents a logical and forward-looking economic partnership, according to analysis reported by The Globe and Mail. This move aligns with India's substantial population expansion and its rapid economic development, both of which have substantially elevated the nation's demand for fossil fuels.
Canada's Commitment as a Reliable Energy Partner
During his visit to India for the India Energy Week, Canadian Minister of Energy and Natural Resources Tim Hodgson emphasized Canada's dedication to supplying energy to India. He firmly stated that Canada will never utilize energy as a tool for "coercion." "We will never use our energy for coercion. We believe middle powers should work together to resist hegemony, and that's why I'm here," Hodgson declared, positioning Canada as a trustworthy ally in the global energy landscape.
Analysts Highlight India's Growing Energy Demand
Susan Bell, senior vice-president of commodity markets at Rystad Energy, told The Globe and Mail that exporting Canadian fossil fuels to India is "definitely worth pursuing." She noted that India already possesses a considerable refining sector, processing approximately six million barrels of crude oil daily, with plans to expand its petrochemical industry. "So it's not just an opportunity for crude oil, it could also be an opportunity for naphtha and potentially even ethane," Bell added, underscoring the diverse export possibilities.
Currently, Canada sells only a limited amount of crude to India. The bulk of India's heavy crude imports originate from Iraq, which could feasibly be substituted with Canadian oil, as Bell pointed out. Furthermore, she highlighted opportunities for other products, such as liquefied natural gas, with India importing about 5 percent of the global supply.
India as the Next Engine for Global Oil Demand
With oil demand from China projected to plateau in the coming decades, "India always comes up as the next big engine for global oil demand," remarked Rory Johnston, an oil analyst with Commodity Context, in the report. Johnston anticipates that oil demand in India will accelerate in 2026, describing the country as "absolutely" a strategic market to target due to its escalating energy needs and massive population.
However, daily oil demand in India grew at a slower rate than expected in 2025, increasing by roughly 100,000 barrels instead of the 300,000 forecast by various agencies, indicating some volatility in projections.
Diversification and Free Trade Principles
Speaking at the India Energy Week 2026, Minister Hodgson addressed the evolving global dynamics, stating, "It is a changing world we live in, and energy is at the centre of that. I'm here because, like you, the way to resist that change is to build multilateral relationships and to double down on diversification of supply."
He criticized the United States for imposing tariffs on countries importing oil from Russia, opposing the notion that "might makes right." "We're not going to live in a world where might makes right. We're not going to live in a world where the strongest put tariffs on everyone else," Hodgson asserted during a discussion at the event.
Instead, he advocated for free trade and trusted relationships, emphasizing the importance of diversifying energy needs. "We relied on one supplier for natural gas, and that was a very strategic blunder. We can never let that happen again. We need to diversify our supply," Hodgson explained, noting that Canada previously directed 98 percent of its energy to a single customer and is now committed to broadening its supply base.
India's Energy Import Dependence
India imports billions of dollars worth of energy annually, with approximately 80 percent of its crude oil requirements met through imports. The Indian government has implemented various measures to boost domestic crude oil production and reduce import reliance, including exploring domestic avenues, but the demand continues to outpace supply, making international partnerships crucial.
In summary, Canada's plan to enhance energy exports to India is driven by mutual strategic interests, with analysts and officials highlighting India's burgeoning demand as a prime opportunity for Canadian energy products, while advocating for diversification and cooperative trade practices in the global market.
