How Does Crude Oil Shape India’s Economy and Why Do Middle East Conflicts Impact Daily Life?

How Does Crude Oil Shape India’s Economy and Why Do Middle East Conflicts Impact Daily Life?

KAKALI DAS

Far away from India, across a distance of nearly 2800 kilometres, conflicts are rising and tensions are building. Yet, even though these events seem distant, their effects are already being felt in the daily lives of millions of people in India.

At the centre of all this attention is one powerful and essential resource that continues to make headlines almost every day. That resource is crude oil.

From autos running on city streets to cars speeding along highways, from flights moving across the sky to the LPG cylinders used in kitchens, crude oil plays a role in keeping everything moving. It powers restaurants, hotels, industries, and homes. So when the price of crude oil rises, the impact is not limited to one sector. It spreads across the entire economy, affecting everyday life in ways both visible and invisible.

To understand why crude oil matters so much, we first need to understand what it actually is. Most of us have learned in school that crude oil is a mixture of hydrocarbons. These hydrocarbons were formed from the remains of plants and animals that lived millions of years ago, mainly in marine environments. Over time, these remains were buried deep under layers of sediment. Heat and pressure slowly transformed them into the substance we now call crude oil. The word crude simply means raw or unprocessed. This means that crude oil cannot be used directly in its natural form. It has to be refined and broken down into different usable products such as LPG, petrol, diesel, and many others.

Not all crude oil is the same. One important difference lies in its sulphur content. Crude oil that contains very little sulphur is known as sweet crude. It is easier to process and requires less refining. On the other hand, crude oil with a high sulphur content is called sour crude. This type needs more treatment and processing before it can be used. For example, much of the crude oil that India imports from West Asia tends to be heavier and contains more sulphur. This means it requires additional refining. In contrast, crude oil from countries like the United States is often lighter and sweeter, making it easier to process.

The refining process of crude oil is both fascinating and complex. Crude oil is made up of hundreds of different molecules, and each of these molecules has a different boiling point. To separate these molecules into useful products, a process called fractional distillation is used. In a refinery, crude oil is first heated until it turns into vapour. This vapour is then passed into a tall structure known as a distillation tower. This tower is designed in such a way that it is very hot at the bottom and gradually becomes cooler towards the top.

As the vapour rises through the tower, it begins to cool. Different molecules condense back into liquid form at different temperatures. This allows them to be collected at different levels of the tower. At the very top, the lightest molecules form liquefied petroleum gas or LPG, which is commonly used in kitchen cylinders. Just below that is naphtha, which is used to make plastics, synthetic fibres, fertilizers, and medicines. Below naphtha comes petrol, which fuels most cars and two wheelers. Further down is kerosene, which is often used as aviation fuel for aircraft. After that comes diesel, which powers trucks, buses, trains, and ships. At the bottom of the tower are the heaviest substances. These include fuel oil used in ships and power plants, as well as bitumen, a thick material used in road construction.

This entire process shows how deeply crude oil is connected to everyday life. It is not just about fuel for vehicles. It is present in the materials we use, the roads we travel on, and even the medicines we depend on. This is why any change in the price of crude oil has a wide reaching impact.

For a country like India, crude oil is especially important. India does not have enough of its own oil resources to meet its needs. As a result, it imports a large portion of the crude oil it uses. However, India has developed strong refining capabilities over the years. It is currently one of the largest oil refining countries in the world. With 23 refineries and a combined capacity of around 258 million metric tonnes per year, India not only refines the oil it imports but also exports some of the refined products.

Despite this strength, India remains highly dependent on global oil markets. When crude oil prices rise due to conflicts, supply disruptions, or political tensions, the effects are quickly felt in India. Fuel prices increase, transportation costs go up, and this leads to a rise in the prices of goods and services. From food items to daily essentials, everything becomes more expensive. This is why crude oil is not just an energy issue. It is also an economic issue that affects inflation, growth, and the overall well being of people.

If we shift our focus to the Middle East, we see a region that is deeply connected to oil. The Middle East is known for its vast oil reserves, but it is also a region marked by political tensions, conflicts, and economic contrasts. There are towering skyscrapers and great wealth, but there are also areas facing poverty and instability. Much of this complexity is linked to oil.

This raises an interesting question. Why is so much crude oil found in the Middle East?

To answer this, we need to go back millions of years into Earth’s history. Crude oil, as we know, was formed from the remains of microscopic organisms that lived in ancient oceans. These organisms included tiny plants and algae that thrived in water.

Around 100 million years ago, many parts of what is now the Middle East were covered by a vast ocean known as the Tethys Sea. This sea was rich in nutrients, carried by rivers flowing from nearby land. These nutrients supported the growth of massive populations of microscopic organisms. When these organisms died, their remains sank to the bottom of the sea and began to accumulate.

However, not all such deposits turn into oil. Certain conditions are necessary for oil formation. The area must be rich in organic material, the burial process must happen quickly, and the environment must have very little oxygen. These conditions prevent the organic matter from decaying completely. In the Tethys Sea, these exact conditions were present. The remains of organisms were quickly buried under layers of mud, sand, and salt. In some cases, these layers were thousands of metres thick.

At the same time, parts of the sea had stagnant water with very little movement. This created low oxygen conditions on the sea floor. Without enough oxygen, bacteria could not fully break down the organic material. Over millions of years, the combined effects of heat and pressure transformed this material into crude oil and natural gas.

But how did this oil, formed under the ocean floor, end up on land?

The answer lies in the movement of Earth’s tectonic plates. The surface of the Earth is divided into large plates that are constantly moving, although very slowly. Over millions of years, these movements can cause dramatic changes.

Around 50 million years ago, the Indian plate collided with the Eurasian plate. This collision led to the formation of the Himalayas. Before this event, the Tethys Sea lay between these land masses. As tectonic activity continued, the Arabian plate also moved and collided with the Eurasian plate. This movement pushed parts of the ancient sea floor upwards, lifting them above sea level.

Over time, these raised areas became the land we now call the Middle East. Along with the land, the oil and natural gas trapped beneath it were also brought closer to the surface. This is why the Middle East has such large reserves of oil compared to many other regions.

Today, oil continues to play a major role in shaping global politics and economics. It has brought wealth to some regions, but it has also contributed to conflicts and instability. At the same time, the world is becoming increasingly aware that oil is a finite resource. There is only a limited amount available, and it cannot be replaced once it is used up.

As the number of vehicles and machines increases, the demand for fuel continues to grow. This creates pressure on existing resources and adds to environmental concerns. Burning fossil fuels like oil releases greenhouse gases, which contribute to climate change. It also leads to air and water pollution, affecting both human health and the environment.

Because of these challenges, there is a growing shift towards renewable energy sources. These include solar energy from the sun, wind energy from moving air, hydro energy from flowing water, geothermal energy from the heat inside the Earth, and biomass energy from plant materials. These sources are not only more sustainable but also cleaner.

The transition to renewable energy is not just an environmental necessity. It is also an economic and social opportunity. It can reduce dependence on imported fuels, create new jobs, and improve energy security. For countries like India, this shift is especially important as it can help reduce the impact of global oil price fluctuations.

In the end, crude oil remains one of the most important resources in the modern world. It powers economies, shapes geopolitics, and influences everyday life in countless ways. But at the same time, it also reminds us of the need to move towards a more sustainable and balanced future.

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