New Delhi: According to a recent report from the International Energy Agency (IEA), India is poised to spearhead the growth of global oil demand through 2035.
The report indicates that India is expected to contribute nearly 2 million barrels per day (mb/d) to the global oil demand during this timeframe, positioning it as the foremost driver of growth in the industry.
It emphasized that "India emerges as the primary contributor to oil demand growth, adding close to 2 million barrels per day (mb/d) by 2035."
This development occurs as China, which has traditionally been the key player in oil market expansion, shifts towards energy sources driven by electricity.
The report also pointed out that China's oil consumption for road transportation is anticipated to decrease due to the increasing adoption of electric vehicles. However, this reduction is somewhat balanced by a rise in oil consumption for petrochemical production.
On a global scale, the growth of oil demand is decelerating under the Stated Policies Scenario (STEPS), presenting significant challenges for major oil-producing countries. These nations may encounter an oversupply situation, with spare crude oil production capacity projected to reach 8 mb/d by 2030.
Furthermore, the IEA cautioned about possible short-term disruptions to oil and gas supplies stemming from geopolitical tensions in the Middle East.
It noted that around 20 percent of the world's oil and liquefied natural gas (LNG) supplies currently transit through the Strait of Hormuz, a vital maritime chokepoint in the region.
The report indicated that, despite existing risks, a potential stabilization of prices in the long term could result from easing market balances and a slowdown in oil demand growth.
Moreover, a significant shift is occurring within the transportation sector. According to the report, road transport has been responsible for an increase in oil demand of 4.2 mb/d over the last ten years, accounting for nearly half of the global oil demand growth.
However, this pattern is beginning to reverse, with projections indicating a decline in oil demand for passenger vehicles by 1 mb/d by 2030. This shift is a crucial element contributing to the expected peak in global oil demand by the decade's end, as outlined in the STEPS.
Looking forward, new LNG projects are anticipated to boost global export capacity by nearly 50 percent by 2030, significantly altering the global energy landscape. As nations respond to these changes, the report highlights that India's rising energy requirements will be pivotal in influencing global oil markets.
