New Delhi: India, the world’s third-largest oil-consuming and importing nation, will lead global oil demand growth by a large margin, adding a steep 1 million barrels per day by 2030 on the back of stellar economic expansion, IEA said on Tuesday.
The global oil demand is expected to grow by 2.5 million barrels a day by the end of the decade, reaching a plateau near 105.5 million barrels per day (bpd) by 2030, the International Energy Agency (IEA) said in its latest report released Tuesday.
Barring any major disruption to the oil market, the world is expected to remain well supplied through the end of the decade, the global energy watchdog said, though rising geopolitical risks in the Middle East and unresolved trade tensions could cast a shadow over the outlook.
IEA forecast India’s demand for crude oil, which is converted into fuels like petrol and diesel in refineries, to rise from 5.64 million bpd in 2024 to 6.66 million bpd in 2030.
The country meets over 95 per cent of its oil needs through imports as domestic production is declining.
“India’s oil demand will increase by a steep 1 million bpd over the forecast period - more than any other country - in the wake of stellar GDP expansion, at an average annual rate of 2.8 per cent,” it said.
The United States, the world’s top oil consumer, may see demand peaking at 20.47 million bpd in 2025 (20.42 million bpd in 2024) before starting to fall and may end at 20.01 million bpd in 2030.
Chinese oil demand is projected to peak in 2027 when it will touch 16.95 million bpd (16.63 million bpd in 2024) before starting to decline and reach 16.66 million bpd in 2030.
India, IEA said, will remain the world’s fastest-growing major economy in 2025 for a fourth year running and is projected to overtake Japan as the world’s fourth-largest economy this year.
“Moreover, while all key (petroleum) products will contribute to the expansion, transport fuels will lead the gains (in India) - a global anomaly,” it said.
In relative terms, jet fuel/kerosene will rise the fastest, at almost 6 per cent annually. The fuel, starting from a low base, stands to benefit the most from population growth of 5 per cent between 2025 and 2030 and its rapidly expanding middle class keen to spend on luxury goods and services, including foreign travel.
“A similar dynamic propels annual gasoline (petrol) demand growth of 4 per cent, which has significant scope for expansion given low levels of car ownership,” IEA said, adding its projections assume a 40 per cent increase in the size of the car fleet by 2030.
The rate of expansion in the car fleet comfortably outstrips the impact of efficiencies and EVs, with growth in the latter category, mainly in two- and three-wheelers. “A risk to our outlook is that the consumption boom driving demand for India’s transport fuels is to a large extent debt-fuelled,” it said.
Borrowing has become increasingly commonplace among India’s middle class. Household debt rose to 43 per cent of GDP in 2024, up from 35 per cent in 2022, and a possible credit spiral could derail expansion.
Demand for industrial-linked products will only marginally lag the growth rate for retail-oriented transport fuels, with annual increases in gasoil, naphtha and LPG/ethane of 3.3 per cent, 2.0 per cent and 2.5 per cent, respectively.