As Oil Demand Soars, Is India Ready for an Energy Tug-of-War?
India is poised for a significant increase in domestic oil consumption over the next decade, with demand projected to grow at an annual rate of 4%, according to S&P Global Commodity Insights, a division of S&P Global.
New Delhi: India is poised for a significant increase in domestic oil consumption over the next decade, with demand projected to grow at an annual rate of 4%, according to S&P Global Commodity Insights, a division of S&P Global.
Table of Contents
Oil Demand Reaches 4.8 Million Barrels Per Day in 2025
As per the latest estimates, India’s oil demand in 2025 is expected to hit 4.8 million barrels per day (mbpd), marking a 4.3% rise compared to the same period last year. The increase is attributed to positive economic growth indicators and enhanced availability of crude oil supplies from exporting nations.
Russia Continues Uninterrupted Oil Supply
India’s crude oil procurement remains stable, especially with Russia continuing uninterrupted oil supplies for the fourth consecutive year. Pulkit Agrawal, Head of India Content (Cross Commodities) at S&P Global, noted that favorable economic growth is a key driver behind India’s escalating oil demand. He also emphasized India’s growing importance in the global energy landscape.
Oil Prices Ease Amid Global Supply Growth
Despite rising demand in India, global oil prices have softened this year due to increased supply from oil-exporting countries and a moderate decline in global demand.
Renewable Energy Transition Hinges on Cost Reduction
While India is advancing toward clean energy alternatives, Gauri Johar, Executive Director, pointed out that the shift toward green energy depends heavily on cost reductions. She highlighted that government policies, regulatory frameworks, and corporate initiatives will play a vital role in accelerating this transition.
However, Johar cautioned that a switch to renewable energy does not imply the complete phasing out of traditional fuels. “Even though the world has moved from coal to oil, coal consumption has not entirely ceased—in fact, it has increased,” she noted.
Petrochemical Demand to Outpace GDP Growth by 2025-26
Despite concerns over domestic market slowdowns, urban demand drops, and inventory build-ups due to tariff uncertainties, India’s petrochemical demand is expected to surpass GDP growth in the 2025–26 period. Stuti Chawla, Associate Director, stated that global producers are facing challenges like weakening demand, uncertain tariffs, reduced margins, and overcapacity, leading them to pin their hopes on the Indian market.
