India to soon surpass China as largest driver of global oil demand driver through 2030, says IEA

According to the report released at the India Energy Week (IEA) 2024 in Goa, India is on track to lead an increase in oil demand of nearly 1.2 million barrels per day.

A view of the logo of the International Energy Agency in Paris, France, December 15, 2023 | File Photo | Reuters

Quitol, India: India is expected to be the largest driver of global oil demand growth between 2023 and 2030, narrowly taking the lead from top importer China, the International Energy Agency (IEA) said on Wednesday.

The world’s third-largest oil importer and consumer is on track to post an oil demand increase of almost 1.2 million barrels per day (bpd), accounting for more than one-third of the projected 3.2 million bpd global gains, the IEA said in a report released at the India Energy Week in Goa.

The agency forecast India’s demand would reach 6.6 million bpd in 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,” it added.

To meet this demand, India is expected to add 1 million bpd of new refining capacity over the seven-year period and this will increase its crude imports further to 5.8 million bpd by 2030, the IEA said.

Among products, diesel will be India’s single largest source of oil demand growth on the back of massive industrial expansion, accounting for almost half of the rise in the nation’s demand and more than one-sixth of total global oil demand growth through to 2030, the IEA said.

Jet fuel is poised to grow at 5.9% annually on average but this will be from a low base compared with other countries, it added.

The electrification of India’s vehicle fleet will lead to a more muted 0.7% annual growth average for gasoline, the IEA said. New electric vehicles and energy efficiency improvements in India will avoid 480,000 bpd of extra oil demand from now to 2030, it added.

(Reporting by Sethuraman NR and Nidhi Verma in Goa; Writing by Florence Tan and Emily Chow; Editing by Jacqueline Wong and Jamie Freed)

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