India to surpass China as the main contributor to global oil consumption by 2027
India is predicted by the International Energy Agency to overtake China as the primary driver of the world’s oil demand by 2027.
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India is predicted by the International Energy Agency to overtake China as the primary driver of the world’s oil demand by 2027. India’s oil demand is expected to rise by 1.2 million barrels per day between 2023 and 2030, according to the International Energy Agency’s recently issued research, “India Oil Market Outlook to 2023.”
“India is forecast to be the single largest source of global oil demand growth from 2023 to 2030, narrowly ahead of China. Underpinned by strong economic and demographic growth, the country is on track to post an increase in oil demand of almost 1.2 mb/d over the forecast period, accounting for more than one-third of the projected 3.2 mb/d global gains,” IEA stated in its report ‘India Oil Market Outlook to 2023’.
At the moment, India uses 19 million barrels of oil every day. According to the analysis, compared to other large economies. In China, nearly all net gains will go into chemical production, accounting for only 18% of the country’s demand increase, compared to over 90% worldwide for petrochemical feedstock consumption.
“This balanced growth profile results from India’s dynamic economic development trajectory and relatively low per-capita fuel use. In particular, rapid progress in the manufacturing, commerce, transport and agriculture sectors will translate into continued sharp gains in diesel use,” the report added.
According to the analysis, there will be a notable increase in demand for aviation turbine fuel, naphtha, and diesel until 2030. Specifically, there is a projected 6.9% growth in jet fuel demand, and 4.5% growth in naphtha and diesel demand.
According to the IEA, India is expected to see the fastest growth rate among the major economies in 2024 for the third consecutive year. For 2024–2030, Oxford Economics projects an average annual GDP growth rate of 6.5%, driven by the sizeable domestic consumer market, a cheap labor force, and advantageous demographics.
“India’s oil consumption is set to increase at a faster pace than other countries, in part, because the country is still in the initial stages of economic development,” IEA added.
“Additionally, the government’s ambitions to improve the country’s subpar infrastructure is supporting both industrialisation and faster oil demand growth,” it continued.
“We estimate that electrification will displace more than 200 kb/d (thousand barrels per day) of oil consumption by 2030, with about 70% coming from lower gasoline use. This exceeds the relative share of gasoline vehicles in the car fleet,” IEA mentioned.
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