Diesel the culprit of India's oil demand growth in 2024: OPEC

India is expected to see healthy oil demand growth of 228 thousand barrels per day (tb/d) year-on-year in 2024, as per the latest monthly outlook report by the Organisation of Petroleum Exporting Countries (OPEC). Diesel is projected to be the main driver behind oil demand growth, supported mostly by agriculture, construction and manufacturing activities. Additionally, annual traditional festivities are expected to support transportation activity and boost gasoline demand. In the first six months of 2024, the country's oil demand is projected to expand by an average of around 250 thousand barrels per day year-on-year.

As per the report, in the near term, economic activity in the country is expected to remain robust. The healthy economic momentum in 2024 is expected to continue in 2025. “Furthermore, manufacturing and business activities in India are expected to be steady, supporting an oil demand increase of 228 tb/d, y-o-y. Diesel is expected to continue to be the main driver of demand, followed by the ‘other products’ category, mostly supported by bitumen. Similarly, demand for transportation fuels and petrochemical feedstock is expected to remain healthy and support oil demand over the year,” says the report.

Meanwhile, the global oil demand growth for 2024 is projected at 2.2 million barrel per day. In Q1 of 2024, the oil demand growth in the OECD (Organisation for Economic, Cooperation and Development) such as Europe is expected to expand by 0.3 million barrel per day and the non-OECD by about 2 million barrel per day (mb/d). In 2025, global oil demand is expected to see robust growth of 1.8 million barrel per day year-on-year, according to the report.

OPEC expects oil demand in OECD to grow by 0.1 million barrel per day year-on-year, whereas demand in the non-OECD is projected to increase by 1.7 million barrel per day.

“In 2024, global oil demand is expected to grow by a healthy 2.2 mb/d, y-o-y, led by robust demand from non-OECD regions, mainly China, Middle East and Other Asia. On a quarterly basis, global oil demand is expected to grow by around 2.0 mb/d, y-o-y, in 1Q24, 2.2 mb/d y-o-y in 2Q24, 2.7 mb/d y-o-y in 3Q24 and 2.1 mb/d y-o-y in 4Q24,” says the report.

During summer, and focusing on transportation fuels, OPEC forecasts the global demand for jet/kerosene to grow by 0.6 million barrel per day, y-o-y, in Q2 of 2024 and by 0.8 million barrel per day, y-o-y, in Q3 of 2024. Moreover, the demand for gasoline and diesel is projected to increase by 0.4 million barrel per day and 0.2 million barrel per day, y-o-y, respectively, in 2Q24. In the third quarter of 2024, the gasoline demand is projected to expand by 0.8 million barrel per day, while diesel is projected to increase by 0.3 million barrel per day, globally.