Oil & Gas

Between 1998 and 2023, China consistently outpaced India in terms of oil demand growth. However, in 2024 and 2025, this trend is set to shift, with India emerging as the primary driver of global oil consumption growth. According to the U.S. Energy Information Administration (EIA), India is projected to account for 25% of the world’s oil demand increase in the next two years.

In 2024, India’s oil consumption growth is expected to rise by 220,000 barrels per day (bpd), significantly outpacing China’s forecasted increase of just 90,000 bpd. This trend will continue in 2025, with India’s demand growing by 330,000 bpd, while China’s growth is expected to remain at a lower 250,000 bpd.

This shift in oil demand dynamics reflects India’s growing fuel consumption, driven largely by rising transportation fuel needs. Meanwhile, China’s demand has been slowing due to factors such as the widespread adoption of electric vehicles (EVs) and LNG-fueled trucks, which are displacing traditional gasoline and diesel consumption.

The weakening of China’s oil demand, combined with slower-than-expected economic growth, has had a noticeable impact on global oil prices. As China’s economy struggles, oil demand has been weaker than anticipated, leading to several consecutive downward revisions in global oil demand forecasts by organizations like OPEC and the International Energy Agency (IEA).

India’s oil demand, on the other hand, continues to surge, fueled by its robust economic growth, a burgeoning middle class, and a growing population. Despite the seasonal slowdown during the monsoon, India’s oil consumption has been growing at higher rates than China’s.

Experts predict that this growth will persist for the foreseeable future, with India being one of the key contributors to global oil demand in the coming decades. According to OPEC’s World Oil Outlook 2050, India alone will account for an additional 8 million bpd of oil demand by 2050, while China’s demand is expected to grow by only 2.5 million bpd during the same period.

In response to this rising demand, India is investing heavily in expanding its refining capacity. Indian refiners are actively seeking funding for new refineries to meet the growing domestic need for fuel. For instance, Bharat Petroleum Corporation Ltd (BPCL) is in talks with local banks to secure around $3.8 billion for refinery expansion.

Similarly, Chennai Petroleum Corporation is negotiating a loan of $3.33 billion to build a refinery in Tamil Nadu. These efforts are part of India’s broader strategy to become a refining hub in Asia while continuing to rely on fossil fuels until at least 2040, as stated by Indian Petroleum Minister Hardeep Singh Puri. This growth trajectory underscores India’s position as a key player in the future of global oil demand.