India to lead global oil demand growth by 2030, says IEA

In a recent report unveiled at the India Energy Week 2024 in Goa by the International Energy Agency (IEA), it was revealed that India is poised to become the largest driver of global oil demand growth until 2030. The report, titled 'Indian Oil Market Outlook to 2030', highlights India's leading role in the global oil market, fueled by robust economic growth, population expansion and evolving demographics.

Urbanisation, industrialisation and the rise of a prosperous middle class, coupled with initiatives for clean cooking are key factors propelling the growth in oil demand within India. The report forecasts a significant increase of almost 1.2 million barrels per day (mb/d) in India's oil demand by 2030, representing over one-third of the projected global increase of 3.2 mb/d, reaching a total of 6.6 mb/d.

Diesel/gasoil emerges as the primary driver of India's oil demand growth, accounting for nearly half of the nation's demand increase and over one-sixth of global oil demand growth. Additionally, jet-kerosene demand is expected to rise substantially, albeit from a lower base compared to other nations, while gasoline growth remains moderate due to the electrification of the vehicle fleet.

The report underscores the Indian government's efforts in promoting clean cooking programs, leading to a three-fold surge in LPG imports over the past decade. Continued initiatives are anticipated to drive further LPG demand growth through 2030. To meet the domestic oil demand, Indian oil companies are heavily investing in refining capacity expansion. The report projects the addition of 1 mb/d of new refinery distillation capacity over the next seven years, surpassing investments in any other country outside of China.

The IEA report highlights the significant role of electric vehicles (EVs) and energy efficiency improvements in curbing oil demand growth, estimating a reduction of 480 kb/d in extra oil demand between 2023 and 2030. Biofuels are also poised to contribute significantly to India's transport sector decarbonization, with the country's ethanol blending rate among the world's highest.

As India solidifies its position as a key player in the global oil market, the report emphasises the need for strategic planning and investments to meet the burgeoning energy demand while addressing environmental concerns.