According to a report released by the International Energy Agency (IEA) on Wednesday, India will become the biggest driver of global oil demand, overtaking China by 2027.
International Energy Agency Forecasts
Oil –
Despite accelerated green energy moves, India’s oil demand will grow at a rapid pace by 2030, Keisuke Sadamoni, the director of energy markets and security at IEA said.
Paris-based agency in a special Indian Oil Market Outlook to 2023, reported that India’s oil demand will rise from 5.48 million barrels per day in 2023 to 6.64 million bpd in 2030.
Diesel –
As per the report, additional demand in India will be more diverse across product categories than in other countries. Only 18 percent of the country’s demand growth will be for petrochemical feedstock use, while globally it will be more than 90 percent.
The report added that the country’s dynamic economic development and rapid progress in manufacturing, transport, commerce, and agricultural sectors will lead to more demand for diesel.
The report also forecasts significant demand growth for aviation turbine fuel by 6.9 percent, naphtha by 5.9 percent, and diesel by 4.5 percent up to 2030.
Gasoline –
Transportation demand is expected to grow. With an increase in vehicle electrification, this will affect curbing gasoline demand growth than diesel.
As per the report, gasoline demand is expected to increase from 2023-2030 due to the rise in the use of electric vehicles, especially two and three-wheelers).
The report forecasts that electrification will displace more than 200 kb/d (thousand barrels per day) of oil consumption, with about 70 percent coming from lower gasoline use, by 2030.
Expansion in the Indian consumer market
India is the third largest consumer of oil after the US and China and consumes 19 million barrels of oil per day. It imports 85 percent of its oil need and this dependence will rise as domestic production falls. IAE reported, India is on a track of expansion among major economies in 2024, for the straight third year.
Oxford Economics forecasts a 6.5 percent average annual GDP growth rate for 2024-2030, due to India’s massive domestic consumer market, low-cost labor force, and favorable demographics.
And as domestic consumption increases, India’s energy-intensive manufacturing sector will expand which will attract international companies diversifying their supply chains from China.
