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. India is on track to post an increase of almost 1.2 mb/d (millions of barrels per day), accounting for more than one-third of the projected 3.2 mb/d global gains, to reach 6.6 mb/d by 2030, according to an India Market Outlook analysis by the International Energy Agency (IEA).
''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'', says IEA. India was already the world’s second-largest crude oil net importer in 2023, having boosted imports by 36% over the past decade to 4.6 mb/d to meet rising refinery intake. Increased refining processing will lift crude oil imports to 5.8 mb/d by 2030.
Noting that Indian oil companies are investing heavily in the refining sector to meet the rise in domestic oil demand, IEA says 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 by 2030. 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 the Indian oil supply falling to 540 kb/d by 2030, according to IEA.
IEA observes that petrol/diesel demand will grow only by 0.7% on average, as the electrification of India’s vehicle fleet avoids a more substantial rise. Increased uptake in electric vehicles is set to play a key role in decarbonising the transport sector and new EVs and energy efficiency improvements will avoid 480 kb/d of extra oil demand in the 2023-2030 period. That means, without these gains India’s oil demand would reach a much higher 1.68 mb/d by 2030 compared with the current forecast. India's progress in bringing clean cooking programmes to its rural populations has led to LPG imports surging nearly three-fold in the past decade and further initiatives will see demand growth continue through 2030.