India to lead global oil demand growth by 2030 on economic expansion: IEA

IEA report shows India will add 1 million barrels per day to global oil demand by 2030, driven by GDP growth, rising car use, industrial activity and clean fuel adoption

India is projected to contribute the most to global oil demand growth by 2030, adding 1 million barrels per day (bpd), according to a report by the International Energy Agency (IEA).

 

The IEA stated that global oil demand is expected to increase by 2.5 million bpd by 2030, reaching around 105.5 million bpd. India, which imports more than 95 per cent of its oil, will see its crude oil demand rise from 5.64 million bpd in 2024 to 6.66 million bpd in 2030.

 

“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 gross domestic product (GDP) expansion, at an average annual rate of 2.8 per cent,” the IEA stated.

 

 

India will continue to be the third-largest oil consumer and importer globally and is set to remain the fastest-growing major economy in 2025 for the fourth consecutive year.

Industrial demand

Jet fuel and kerosene are forecast to see the highest annual growth at nearly 6 per cent. The increase is attributed to population growth of 5 per cent between 2025 and 2030 and the expansion of the middle class.

 

Demand for industrial fuels such as gasoil, naphtha, and liquefied petroleum gas (LPG)/ethane is projected to grow annually by 3.3 per cent, 2.0 per cent, and 2.5 per cent, respectively.

 

Gasoil, which accounts for one-third of India's oil consumption, is expected to rise by 380,000 bpd during the forecast period due to urbanisation, industrial activity, and infrastructure development.

 

Growth in petrochemical feedstocks is aligned with new projects, while LPG demand is supported by the adoption of clean cooking practices.

Cars on the road

The agency said that the car fleet in India is projected to increase by 40 per cent by 2030.

 

The growth in vehicle numbers is expected to exceed the impact of fuel efficiencies and the rise in electric vehicles, which are mainly seen in two- and three-wheeler segments.

 

“A risk to our outlook is that the consumption boom driving demand for India's transport fuels is to a large extent debt-fuelled,” the report added. 

 

However, electric vehicles are expected to displace 5.4 million bpd of oil demand by the same year. Electric car sales reached 17 million in 2024 and are projected to exceed 20 million in 2025.

Subsidy programmes

Government subsidy programmes, especially the Pradhan Mantri Ujjwala Yojana launched in 2016, have contributed to the spread of LPG use in households.

 

The report indicated that while global demand will continue to rise, structural shifts in supply and consumption patterns will influence the oil market in the coming years.

Headwinds

India’s domestic crude oil production is projected to fall slightly by 30,000 bpd, reaching 670,000 bpd by 2030.

 

The IEA highlighted a rise in household borrowing in India, with debt levels growing to 43 per cent in 2024 from 35 per cent of GDP in 2022.