Daily Management Review

IEA Anticipates India To Drive Demand For Oil Globally


IEA Anticipates India To Drive Demand For Oil Globally
Currently the third-largest oil importer and consumer in the globe, India is expected to become the main driver of the world's oil demand in the second half of this decade, according to a statement released by the International Energy Agency (IEA) on Wednesday. India is expected to boost its oil consumption by a significant 1.3 million barrels between 2023 and 2030, according to the IEA's Oil 2024 Report. The research also emphasises how, with the exception of China, India is predicted to have the fastest rise in oil consumption throughout this time.
India's oil consumption is predicted to rise by 3.2 percent, or 1.3 million barrels per day (bpd), from 5.4 million bpd in 2023 to 6.7 million bpd by 2030.
Surprisingly, the increase of more than 1.3 million bpd globally will be mostly caused by increased demand for fuels used in road transport, with petrochemical feedstocks making up a very small portion of the total. Furthermore, it is anticipated that organic growth would outpace the adoption of sustainable energy technology.
"In the latter half of this decade, India is poised to emerge as the predominant driver of overall growth," said the research.
India's projected 900,000 bpd rise in oil consumption between 2025 and 2030 is expected to outpace China's 570,000 bpd increase and account for three-quarters of the net worldwide increases over that time.
According to IEA predictions, oil demand will peak globally by 2029 and begin to fall the following year.
India's rising oil demand is mostly due to its strong economic growth. For the third year in a row, India is expected to continue being the largest economy with the fastest rate of growth in the world in 2024.
The manufacturing and industrial sectors have demonstrated significant resilience, supported by a substantial domestic consumer market, a healthy labour force, and advantageous demographics that are anticipated to maintain this trend.
The population of the country is expected to rise by 6% between 2023 and 2030, making it the largest in the world after recently overtaking China. Moreover, it is anticipated that rising average salaries would increase demand for mobility.
According to the IEA, between 2023 and 2030, road diesel—the most used fuel in India and one that is directly related to industry and commerce—will contribute 520,000 barrels per day to the expansion, or 38 percent of the entire increase. Similarly, it is anticipated that petrol (petrol) would climb by 270,000 barrels per day, accounting for 20 percent of the whole increase, due to the growing number of people who own cars.
Demand in this country is higher than in any other.
In India, the number of automobiles on the road climbed eightfold between 2000 and 2023. But there is still room for expansion, as evidenced by the fact that China had over seven times as many automobiles as India had in the previous year.
According to IEA forecasts, the number of cars on the road is expected to grow by almost 40% by 2030.
Fuels like petrol and diesel are created by refining crude oil that is taken from subterranean and marine sources. More than 85% of India's needs for crude oil come from imports.
India's import needs are predicted to rise from 4.6 million to 5.6 million barrels per day (bpd), an increase of around 1 million barrels per day (bpd), according to the IEA. Ambitious plans to expand refineries are driving this growth, adding the ability to process one million barrels of oil per day.