India’s oil demand expected to grow 4% annually over next decade

New Delhi: India’s domestic demand for oil is expected to increase at a CAGR (compound annual growth rate) of 4 per cent over the next decade, S&P Global Commodity Insights, a division of S&P Global, said on Wednesday.

In 2025 so far, oil consumption in India stands at 4.8 million barrel per day (MBPD), up 4.3 per cent from the previous calendar year. The country’s crude oil demand is 5.4 MBPD this year.

The global oil prices have lost some shine in 2025 year-to-date on the back of a challenging demand environment exacerbated by supply growth from OPEC+ as well as beyond, Pulkit Agarwal, Head of India Content (Cross Commodities), said. “For India, oil demand continues to grow, helped by favourable demographics and economic growth. India is quickly assuming a prominent place in the global oil demand growth order, while the base is still small to have an oversized implication on the global markets,” he said.

The oil demand is expected to continue to grow at a CAGR of 4 per cent for a decade, Agarwal said.

India’s choice of oil sources continues to evolve as India’s pivot to Russia continues largely unhindered in the fourth year of their meaningful initiation, Agarwal said.

Stuti Chawla, Associate Director, India and Middle East Chemicals Pricing, said India’s petrochemical demand is likely to outpace GDP growth in 2025-26 (Apr-Mar), despite concerns over a drop in urban demand and inventory build-up seen in the domestic markets amid tariff concerns.