Fromsomewhat bias IEA of all places: https://www.iea.org/reports/indian-oil-market/executive-summary
India’s role in global oil markets is expected to expand substantially over the remainder of the decade, fuelled by strong growth in its economy, population and demographics. In this Report, we look at how these wideranging changes will impact global oil markets. Our analysis is focused on the future evolution of the country’s oil sector and its increasingly dominant role in international trade, as well as demand, supply and refining developments and the government’s key objectives to reduce oil imports, transition to cleaner fuels and improve energy security.
The global energy crisis has cast energy security as a key political priority for countries across the world – and it is a critical imperative for India given it is highly dependent on oil imports to meet its supply needs. The crisis has also boosted the momentum behind clean energy transitions. For the first time, the IEA sees a peak in global oil demand in all its scenarios this decade. The pace of demand growth diverges markedly across sectors, with road transport fuels set to enter decline first in response to the rapid uptake of electric vehicles, efficiency improvements and the continued rise of biofuels.
The geographic dispersion is perhaps even more significant as countries embark on their transition paths from very different starting points. India will become the largest source of global oil demand growth between now and 2030, while growth in developed economies and China initially slows and then subsequently goes into reverse in our outlook. Urbanisation, industrialisation, the emergence of a wealthier middle-class keen for mobility and tourism, plus efforts to achieve greater access to clean cooking, will underpin the expansion in oil demand. Consequently, India is on track to post an increase of almost 1.2 mb/d, accounting for more than one-third of the projected 3.2 mb/d global gains, to reach 6.6 mb/d by 2030.
The massive industrial expansion means that diesel/gasoil is the single largest source of oil demand growth, accounting for almost half of the rise in the nation’s demand and more than one-sixth of total global oil demand growth through to 2030. Jet-kerosene demand is poised to grow strongly, at around 5.9% per year on average, but from a low base compared to other countries. Gasoline will grow by 0.7% on average, as the electrification of India’s vehicle fleet avoids a more substantial rise. LPG rounds out the growth picture, as petrochemical industry investments in production facilities boost feedstock demand. The Indian government’s world-leading progress in bringing clean cooking programmes to its rural populations have led to LPG imports surging nearly three-fold in the past decade and further initiatives will see demand growth continue through 2030.
Indian oil companies are investing heavily in the refining sector to meet the rise in domestic oil demand. Over the next seven years, 1 mb/d of new refinery distillation capacity will be added – more than any other country in the world outside of China. Several other large projects are currently under consideration that may lift capacity beyond the 6.8 mb/d capacity that we expect so far.
India is set to maintain its position as a key exporter of transportation fuels to markets in Asia and the Atlantic Basin. Continued investment in refining capacity and complexity will boost light and middle distillate production, even as the industry pivots further towards heavier and more sour crudes. India’s role as a global swing supplier has risen since 2022 as the loss of Russian product exports to European markets has increased the pull of Asian diesel and jet fuel westward. In 2023, India was the fourth-largest exporter of middle distillates globally and the sixth largest refinery product exporter at 1.2 mb/d. New refining capacity is forecast to boost product supplies to global markets to 1.4 mb/d through mid-decade before edging lower to 1.2 mb/d by 2030 given the steady rise in domestic demand.
As a relatively small oil producer, and with limited potential for near-term growth, India’s domestic production accounted for just 13% of the country’s supply needs. In 2023, domestic oil production averaged around 700 kb/d. Despite renewed efforts by the government to attract foreign upstream investment, domestic crude oil production is expected to see continued declines over the medium term. A dearth of new discoveries in recent years will contribute to Indian oil supply falling to 540 kb/d by 2030.