• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

Geopolitical tensions jeopardise energy flows in India and Pakistan

by May 9, 2025
written by May 9, 2025

The intensifying tensions between nuclear powers India and Pakistan pose a significant risk of widespread and severe humanitarian consequences for the region.

Escalating tensions highlight the critical need for emergency preparedness in the energy sector. A protracted conflict would significantly threaten both nations’ capacity to satisfy their energy demands, according to Rystad Energy.

The Indian army reported that Pakistan’s armed forces initiated “multiple attacks” involving drones and other munitions across India’s entire western border on Thursday night and early Friday, escalating the conflict between the two nuclear-armed nations.

Source: Rystad Energy

Energy security

There is a significant disparity between India and Pakistan’s strategic petroleum reserves. 

In terms of daily crude demand, India consumes 5.40 million barrels per day (bpd) compared to Pakistan’s 0.25 million bpd, according to Rystad Energy analysis.

India maintains a strategic petroleum reserve of 39 million barrels, with 21.4 million barrels currently in stock. Pakistan, conversely, does not possess any strategic oil reserves, which could expose the country to supply vulnerabilities.

India’s commercial stockpiles are close to 160 million barrels.

“However, the discrepancy goes beyond just demand—India’s strategic and commercial reserves can sustain supply for over a month (33 days), while Pakistan, which lacks any strategic reserves, has only 20 days’ worth in stock,” Rohan Goindi, senior analyst, commodities markets, oil at Rystad Energy said in an emailed commentary.

India, the world’s third-largest crude importer, depends heavily on foreign sources for its oil needs, with approximately 85% of its demand met through imports. 

Similarly, Pakistan imports around 78% of the crude oil required to meet its domestic demand.

Fortunately, refineries in both India and Pakistan are situated outside the conflict zone, mitigating the risk of operational disruptions, Rystad said. 

Additionally, the lack of refineries and LNG terminals in the affected areas suggests that crude oil and LNG imports are unlikely to be directly impacted.

However, a notable difference exists in the level of emergency preparedness between the two nations, which raises concerns, the Norway-based energy intelligence company said.

Water treaty suspension

India has intensified pressure beyond military action through significant diplomatic and infrastructure moves. 

These include suspending the Indus Waters Treaty, expelling Pakistani diplomats, and accelerating five hydroelectric projects in Jammu & Kashmir with over 4,000 MW capacity. 

The hydroelectric projects, previously hindered by treaty-related issues, can now proceed more quickly due to the suspension of procedural obstacles. 

The potential suspension of a long-standing water-sharing treaty poses a significant threat to Pakistan’s energy sector, as 90% of its installed hydropower capacity relies on this agreement, according to Rystad.

The Indus Water Treaty is crucial for both India and Pakistan. 

India has 2.7 GW of hydropower projects relying on rivers covered by the water treaty, which is part of its total installed hydropower capacity of 52 GW nationwide.

Source: Rystad Energy

Disruption to these projects will have a relatively small impact in India as hydropower only contributed 8% to total power generation in 2024.

However, disruption to the water treaty could put up to 9.3 GW of hydropower capacity–equivalent to 90% of Pakistan’s total installed hydropower capacity–at risk, as per Rystad’s analysis.

Uttamarani Pati, analyst, renewables & power research at Rystad Energy said;

If the treaty were to be terminated altogether, India would gain full control of the Indus, Jhelum and Chenab rivers, enabling it to build more hydropower projects and potentially operate existing upstream facilities in ways that could adversely affect its downstream neighbor.

Suspension of water treaty more severe for Pakistan

According to Rystad, the suspension of the Indus Water Treaty will have a more severe impact on Pakistan than for India. 

“Reduced inflow from the Indus and Jhelum rivers will compromise Pakistan’s grid stability and ability to meet peak power demand, especially in the summer months, potentially leading to widespread blackouts.”

Terminating the Indus Waters Treaty (IWT) would allow India to control the Indus, Jhelum, and Chenab rivers, potentially enabling the construction of additional hydropower projects in the area, it further said.

India’s current upstream hydropower operations carry a potential risk of negatively affecting its downstream neighbor. 

This could occur through actions such as sediment flushing and unexpected releases of large volumes of reservoir water, which could lead to flooding.

Rystad noted:

However, no steps have been taken in this direction at present, and any international backlash from such unilateral actions could be significant.

In addition, escalating tensions threaten long-term green energy investments like Pakistan’s Thatta hydrogen project and could disrupt mature projects such as AM Green Ammonia’s Kakinada plant in India due to economic instability and supply chain issues.

Also, in anticipation of supply shocks, India could ramp up purchases of crude oil, which is likely to support prices in the short term.  

The post Geopolitical tensions jeopardise energy flows in India and Pakistan appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Markets fall, defence stocks jump as Indo-Pak tensions flare, but analysts call reaction mild
next post
US stocks open in the green: Dow jumps over 100 points, Nasdaq up 0.6%

related articles

US stocks open in the green: Dow jumps...

May 9, 2025

Markets fall, defence stocks jump as Indo-Pak tensions...

May 9, 2025

Europe markets open: Stoxx 600 points up; focus...

May 9, 2025

Asia markets close: Nikkei rallies, China slips despite...

May 9, 2025

Pi Network ranks 6th in Finland’s app charts,...

May 9, 2025

British Airways parent inks $13bn Boeing deal after...

May 9, 2025

UK’s Crown Estate clears offshore wind expansion to...

May 9, 2025

CoreWeave eyes $1.5B bond raise to ease debt...

May 9, 2025

Panasonic to slash 10,000 jobs in 2025 amid...

May 9, 2025

India offers 9% tariff cut to fast-track $129...

May 9, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Boeing freezes hiring in sweeping cost cuts as it grapples with factory worker strike

    September 17, 2024
  • 2024 Countdown: Harris has post-DNC momentum but Trump is burning up campaign trail with 10 weeks left

    August 27, 2024
  • Vance visits Capitol Hill to urge senators to confirm Elbridge Colby for Pentagon No. 3 post

    March 4, 2025
  • Trump revokes Biden order allowing transgender troops in bid to rid DEI from military

    January 22, 2025
  • Robert F. Kennedy, Jr. suspends campaign, backs Trump for president

    August 23, 2024

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 3

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 4

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (4,442)
  • Investing (604)
  • Stock (735)

Latest Posts

  • First-term House Dem attacks White House spox Karoline Leavitt as ‘Fake Christian’

    January 30, 2025
  • USDCHF and USDJPY: USDJPY is moving in a support zone

    July 15, 2024
  • Entrepreneur Retirement Guide: Self-Employed Strategies

    August 6, 2024

Recent Posts

  • DOJ reveals it has Biden transcripts at issue in classified docs case after initial denial

    July 23, 2024
  • DAVID MARCUS: Some Democrats are giving Trump a chance. Republicans, let’s meet them half way

    November 14, 2024
  • Rick Scott knocked out of Senate leader race on first ballot as Thune and Cornyn advance

    November 13, 2024

Editor’s Pick

  • South Korea’s impeached President Yoon Suk Yeol freed from prison after canceled arrest

    March 8, 2025
  • Six in 10 Democrats say Israel bears ‘a lot’ of responsibility for Gaza war: AP poll

    October 30, 2024
  • Tom Cotton slams ‘partisans and obstructionists’ in DOD reportedly plotting to block Trump plans

    November 26, 2024
  • About us
  • Contacts
  • Privacy Policy
  • Terms and Conditions
  • Email Whitelisting

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock