India will drive global oil demand by 2035, claims IEA report
IEA Report: China's oil consumption for road transport is projected to decline due to the rise of electric vehicles, the report said. However, this decline is partially offset by the growing use of oil in petrochemical production. Let's find out what the report says on India.
According to a recent report by the International Energy Agency (IEA), India is set to lead global oil demand growth by 2035. The report pointed out that India will add about 2 million barrels per day (mb/d) to global oil demand during this period, making it the primary growth driver of the entire petroleum industry.
"India is set to become the main source of oil demand growth by adding about 2 million barrels per day (mb/d) by 2035," the report said.
This shift comes at a time when China, which has historically led oil market growth, is moving towards the use of electric-powered energy. The report said China's oil consumption for road transport is projected to decline due to the rise of electric vehicles. However, this decline is partially offset by the increasing use of oil in petrochemical production.
Globally, oil demand growth is slowing under the Stated Policy Scenario (STEPS). This is causing significant challenges for major oil-producing countries. These countries may face an oversupply situation as additional crude oil production capacity is expected to increase to 8 mb/d by 2030. The IEA has also warned of potential near-term disruptions in oil and gas supplies due to geopolitical tensions in the Middle East.
According to the IEA report, about 20 percent of the world's oil and liquefied natural gas (LNG) supplies currently pass through the Strait of Hormuz, a key maritime chokepoint in the region.
Despite these risks, the report fended that prices may stabilize in the longer term, in view of easing market balance and slower oil demand growth.
Besides, a structural shift is sweeping the transport sector. In the past ten years, road transport has added 4.2 mb/d to oil demand, or almost half of the overall increase in global oil demand, the report said.
This is changing, however, with a fall of 1 mb/d in oil demand for passenger cars in 2030. It is one of the main elements in the peak seen in global oil demand at the end of this decade in STEPS. Meanwhile, looking ahead, new LNG projects could add about 50% of the current world export capacity by 2030, further transforming the global energy landscape. While all countries are adapting to changes in the global energy landscape, India's rising demand for energy will take center stage in shaping global oil markets, according to the report.
