India would surpass China as the main source of growth of global oil demand by 2027, according to Toril Bosoni, Head of the Oil Industry & Markets Division of the International Energy Agency (IEA).
Bosoni stated, "Around three-quarters of the 2022-28 increase will come from Asia, with India surpassing China as the main source of growth by 2027," during the launch event of a report titled "IEA Oil 2023 – Supply and demand dynamics to 2028."
Pankaj Jain, Secretary of the Ministry of Petroleum and Natural Gas, spoke at the event and mentioned that India's demand for energy is growing faster than any other major economy, and this trend is expected to continue. Jain said, "Growth will come in all sectors due to favorable demographics supported by urbanization and industrialization."
Jain also provided statistics on India's consumption of petroleum products in FY23, stating that it reached 223 million metric tonnes (MMT), showing a growth rate of about 12 percent compared to the previous year. He highlighted the significant contributions of High-Speed Diesel (HSD) with 85.9 MMT and Motor Spirit (MS) with 34.9 MMT, which experienced growth rates of 12.1% and 13.4%, respectively, over the previous year.
The IEA report mentioned that global oil demand growth is expected to slow down and almost come to a halt by 2028 due to a faster shift toward cleaner energy technologies for energy security reasons. The use of oil for transportation is projected to decline after 2026 as the expansion of electric vehicles, the growth of biofuels, and improving fuel economy reduce consumption. However, countries like China and India are expected to continue registering growth throughout the forecast period.
According to the report, biofuels are anticipated to contribute 10 percent of the new liquid fuel supply growth until 2028. The production of biofuels is projected to increase by nearly 600,000 barrels per day from 2022 to 2028, with Brazil, Indonesia, and India accounting for 70 percent of this increase.
The IEA report also highlighted that global upstream investments in oil and gas exploration, extraction, and production are on track to reach their highest levels since 2015, growing by 11 percent year-on-year to USD 528 billion in 2023.
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