The International Energy Agency (IEA) released on Wednesday that India, the third-largest oil importer and consumer in the world, will take the lead in driving global oil demand in the second half of the decade. The IEA projects a significant 1.3 million barrel increase in consumption between 2023 and 2030.
The Paris-based energy watchdog explained in its Oil 2024 Report that between 2023 and 2030, India’s oil consumption is expected to increase more than any other country’s, save China. India’s oil consumption is expected to increase by 3.2%, or 1.3 million barrels per day (bpd), from 5.4 million bpd in 2023 to 6.7 million bpd by 2030.
Unusually for a global setting, the rise in demand for road transport fuels will account for the majority of the more than 1.3 million bpd increase. Petrochemical feedstocks will play a very minor part, and the underlying expansion will easily outpace the deployment of renewable energy technology.
“In the second half of this decade, India will become by far the most important contributor to overall growth,” it explained. It explained that between 2025 and 2030, India’s oil demand will increase by 900,000 bpd, significantly surpassing China’s 570,000 bpd and accounting for three-quarters of net global growth.
The IEA predicted that global oil demand would peak in 2029 and start to decline the following year.
India’s rapidly growing economy is the main factor driving the country’s rising oil demand. In 2024, India is expected to have the fastest-growing major economy in the world for the third consecutive year. Particularly robust manufacturing and industrial activity is expected to persist due to the sizeable domestic consumer market, a skilled labour force, and favourable demographics.
