India is projected to emerge as the primary driver of global oil demand growth from 2023 to 2030 by the International Energy Agency (IEA), potentially surpassing China as the largest importer.
The IEA revealed this information in a report released during the India Energy Week in Goa.
India, currently the world’s third-largest oil importer and consumer, is expected to witness a substantial increase in oil demand, estimated at nearly 1.2 million barrels per day (bpd) between 2023 and 2030.
This surge would constitute over one-third of the anticipated global increase of 3.2 million bpd during the same period. The IEA forecasts India’s oil demand to rise to 6.6 million bpd by 2030, up from 5.5 million bpd in 2023.
“India will become the largest source of global oil demand growth between now and 2030, while growth in developed economies and China initially slows and then subsequently goes into reverse in our outlook,” the agency said.
Diesel is projected to be the primary driver of India’s oil consumption growth, accounting for nearly half of the nation’s demand increase and over one-sixth of total global oil demand growth until 2030, as per the IEA.
Although jet fuel consumption is expected to grow at an average annual rate of 5.9%, it will start from a relatively lower base compared to other countries.
“In the case of India, compared with China or other parts of the world, the Indian economy still continues to need more transport fuels so we expect India will continue to grow in transportation fuels. So that’s something different from countries like China,” Keisuke Sadamori, the IEA’s director of energy markets and security, said on the sidelines of the conference.
However, the electrification of India’s vehicle fleet is anticipated to result in a more subdued annual growth rate of 0.7% for gasoline through 2030. The IEA predicts that the adoption of electric vehicles and energy efficiency enhancements will mitigate an additional 480,000 bpd of oil demand by 2030.
To meet the rising demand, India is expected to add 1 million bpd of new refining capacity over the next seven years, further increasing its crude imports to 5.8 million bpd by 2030, according to the IEA.
Industry experts at the conference, including Prasad Panicker, chairman of Indian refiner Nayara Energy, and G Krishnakumar, chairman of state-run refiner Bharat Petroleum Corp, emphasized the significant role of petrochemical demand and the continued growth of oil product sales in India.
The IEA report also noted that India’s oil inventories stood at 243 million barrels, with strategic petroleum reserves accounting for 26 million barrels, while the rest comprised industry stocks. The agency highlighted that Indian oil import requirements would escalate rapidly toward 2030 and beyond.