India is set to become the main driver of global oil demand growth through 2030, driven by industrial expansion and the increasing affluence of a growing middle class interested in mobility and tourism, according to a report released Wednesday by the International Energy Agency (IEA).
The report shows that India's oil demand is expected to grow by nearly 1.2 million barrels per day (mb/d), accounting for more than a third of the expected global increase of 3.2 mb/d, to reach 6.6 mb/d by 2030.
Driven by robust domestic demand, the IEA highlighted that India's jet kerosene demand is expected to grow significantly, averaging around 5.9% per annum, while gasoline is expected to grow by an average of 0.7%, driven by electrification initiatives.
India is poised to maintain its status as a major exporter of transportation fuels to markets in Asia and the Atlantic Basin, the agency said. The forecast shows that the addition of new refining capacity will contribute to a surge in product supply to global markets, reaching 1.4 million barrels per day (mb/d) by the middle of the decade. However, this figure is expected to decline slightly to 1.2 mb/d by 2030, assuming stable domestic demand.
The report highlights the advantageous position of India's oil marketing companies (OMCs), which have benefited from discounted Russian crude and substantial inventory gains. These factors have helped to offset the impact of unchanged retail petrol and diesel prices.
"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," the IEA added.