India will become World’s Biggest Oil Demand Growth Driver by 2030: IEA Projections

The International Energy Agency (IEA) forecasts India to become the primary driver of global oil demand growth by 2030, despite a projected decline in domestic production. This trend, highlighted at the India Energy Week 2024, underscores India’s emergence as the second-largest crude importer worldwide.

Divergent Trends in Production and Demand

• India’s domestic oil production expected to decrease by 22% by 2030, reaching 540 thousand b/d.
• India projected to register an increase of nearly 1.2 million b/d in oil demand, accounting for over one-third of global gains by 2030.

Import Dependency and Production Share

• Despite efforts to attract foreign investment, domestic production accounted for only 13% of India’s supply needs in 2023.
• Crude imports surged to 4.6 million b/d in 2023, marking a 36% increase over a decade.

Mitigation Efforts and Electric Vehicle Adoption

• Adoption of electric vehicles and energy efficiency improvements expected to prevent 480 thousand b/d of additional demand during 2023-2030.

Refining Capacity Expansion

• Indian oil companies investing in increasing refining capacity, with an additional 1 mb/d expected over the next seven years.
• Several major projects under review may further augment capacity beyond the current 6.8 million b/d.

Implications for Import Dependency and Supply Security

• Refining capacity expansion set to elevate crude oil imports to 5.8 mb/d by 2030, posing supply security implications.
• Urgency emphasized for India to strengthen Strategic Petroleum Reserve programs and enhance industry preparedness for potential supply disruptions.