NEW DELHI: India will be the new epicentre of oil demand growth over the next decade, says a latest report by the Paris-based International Energy Agency (IEA).
The report, released on Wednesday, highlights that India will lead the world in oil demand growth, rank second in electricity generation and coal demand growth, and be the third-largest contributor to natural gas demand growth over the next decade. The country will account for the largest increase in global oil consumption through 2035, driven by rapid economic expansion, industrialisation, and rising vehicle ownership.
"Oil remains the dominant fuel to 2050 in the CPS (current policies scenario). China accounted for more than 75 percent of oil demand growth over the past ten years, but this picture is changing, and India becomes the new epicentre of growth in oil demand," IEA said.
"India leads global oil demand growth over the next ten years, with almost half of the additional barrels produced globally to 2035 heading in its direction."
According to the IEA, India’s oil use is expected to rise from 5.5 million barrels per day (mbpd) in 2024 to 8 mbpd in 2035 due to rapid growth in car ownership, increasing demand for plastics, chemicals, and aviation, as well as greater use of Liquefied Petroleum Gas (LPG) for cooking.
"Oil demand in India increases by 2 mbpd to 2035 — the largest increase in any country — and continues to rise through to 2050. The next largest increases to 2035 are in Africa (1.2mbpd), and Southeast Asia (1mbpd)," it said.
The agency also projected that India’s import dependency will rise from 87 percent in 2024 to 92 percent in 2035, despite government efforts to boost domestic oil production.
"Since 2022, India has emerged as a global swing supplier, refining volumes of Russian crude oil exports that previously flowed to Europe. India's refining capacity grows from 6 mbpd in 2024 by 1.5 mbpd to 2035 which solidifies its role as a key exporter of transport fuel," it said.