India set to drive global oil demand by 2030: IEA

Oil consumption in India is expected to rise by 1.3 million barrels per day (bpd) between 2023 and 2030

June 12, 2024

India's oil demand will increase from 5.4 million bpd in 2023 to 6.7 million bpd by 2030

Road transport fuels will dominate the demand surge, with diesel and gasoline leading the growth

India's refining capacity will expand by 1 million bpd, reaching 6.8 million bpd by 2030

India remains heavily reliant on imports, with import needs rising to 5.6 million bpd by 2030

India, the world’s third-largest oil importer and consumer, is poised to become the leading force behind global oil demand in the second half of this decade, according to the International Energy Agency (IEA). The IEA’s Oil 2024 Report projects a significant rise in India’s oil consumption by 1.3 million barrels per day (bpd) from 2023 to 2030.

India’s oil demand is set to grow faster than any other country except China during this period. By 2030, India’s demand is expected to reach 6.7 million bpd, up from 5.4 million bpd in 2023. This growth rate of 3.2% or 1.3 million bpd will largely be driven by the increasing need for road transport fuels, overshadowing the comparatively smaller role of petrochemical feedstocks.

The IEA highlighted that India’s demand for road diesel, closely tied to industry and commerce, will account for 520,000 bpd of the total growth. Gasoline demand will rise by 270,000 bpd as car ownership expands. Despite the surge, India’s car ownership is still far behind China’s, suggesting significant potential for further growth.

India’s rapid economic expansion is the primary driver behind this increased oil demand. India’s manufacturing and industrial activities are booming as the world’s fastest-growing major economy. The nation’s population, now the world’s largest, is expected to grow by 6% between 2023 and 2030, with rising average incomes boosting mobility demand.

Two- and three-wheelers, which dominate India’s vehicle count, will remain crucial, especially in urban areas and for last-mile delivery. However, their growth potential is lower than that of passenger cars, and their higher potential for electrification will slightly dampen gasoline demand.

Petrochemical demand growth will be modest, with feedstock needs rising by about 140,000 bpd between 2023 and 2030. Naphtha will be the main component, with LPG and ethane contributing a smaller portion.

India’s refining capacity is projected to grow from 5.8 million bpd in 2023 to 6.8 million bpd by 2030, driven by aggressive expansion programs. Despite this, India will continue to rely heavily on imports, with import needs increasing to 5.6 million bpd by 2030 due to the expanding refinery capacity.

Source: Economic Times

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