India To Lead Global Oil Consumption Growth By 2030: Phillip Capital

New Delhi, Mar 17 (KNN) Global oil supply is projected to exceed demand growth despite increasing consumption in developing economies, according to a report by Phillip Capital. India is expected to be the primary driver of this consumption growth.

The report highlights that with India's GDP growth forecast exceeding 6 per cent annually, the country’s energy demand will continue to rise. India is expected to remain heavily dependent on fossil fuels, including oil, to meet its energy needs.

According to the International Energy Agency (IEA), India’s oil demand is forecast to increase by 1.3 million barrels per day (mbpd) by 2030.

The Organisation of the Petroleum Exporting Countries (OPEC) projects an even larger increase of 1.8 mbpd, bringing India’s total oil consumption to 7.1 mbpd, up from 5.3 mbpd in 2023.

India’s economic expansion, growing middle class, and young population are key factors driving this demand. Strong investments in oilfield services and cost reductions have ensured stable production levels, even amid lower oil prices.

By 2030, global oil supply capacity is expected to grow by approximately 6 mbpd, reaching 113.8 mbpd, according to forecasts by the IEA and OPEC.

Non-OPEC countries will account for 76 per cent of this increase, with the United States contributing between 2.1 and 2.3 mbpd. Other key contributors include Brazil, Guyana, Canada, and Argentina.

The increasing adoption of electric vehicles (EVs) is seen as a potential factor in reducing oil demand. In 2023, 14 million EVs were sold, representing 18 per cent of global car sales, a significant rise from 2 per cent in 2018.

However, EVs currently account for only 2.5 per cent of the total global vehicle fleet, with sales concentrated primarily in China, the European Union, and the United States.

While the IEA projects that EV sales will grow by 23 per cent annually through 2035, potentially displacing 6 mbpd in oil demand by 2030, recent trends suggest that the impact may be limited.

The growing preference for plug-in hybrid electric vehicles (PHEVs) over battery electric vehicles (BEVs) and challenges in electrifying heavy transport could restrict the anticipated decline in oil consumption.

Despite the ongoing transition to renewable energy, global dependence on crude oil and natural gas is expected to persist.

Oil demand growth will be primarily driven by developing nations in a well-supplied market. This balance is likely to result in stable crude prices, ranging between USD 65 and USD 75 per barrel, barring major geopolitical disruptions.

This price range is considered favourable for both upstream and downstream players in India, supporting steady energy supply and economic stability in the oil sector.

(KNN Bureau)