India to overtake China as oil demand growth centre in 2027: IEA

India will surpass China as the largest driver of global oil demand by 2027, despite efforts for clean energy and electrification.

India will overtake China as the biggest driver of global oil demand in 2027 as transportation and industry consumption in the world's fastest-growing major economy will drive growth despite a big push for clean energy and electrification, the International Energy Agency said on February 7.

The Paris-based agency, in a special Indian Oil Market Outlook to 2030 report released at the India Energy Week in Goa, said the country's oil demand will rise from 5.48 million barrels per day in 2023 to 6.64 million bpd in 2030. China currently is the biggest driver of oil demand and India ranks second in growth.

The numbers given by IEA in the report seem to talk of crude oil processed into fuel for domestic use as well as for exports. The domestic consumption as per the Oil Ministry data is around 5 million barrels per day (bpd).

"India's oil demand will grow at a rapid pace by 2030 despite accelerated green energy moves," IEA director of energy markets and security Keisuke Sadamori said. "Growth in India will surpass that of China in 2027." However, demand in India will still lag China's even in 2030 in absolute terms. "As oil demand slows in developed countries and China, India becomes the largest source of growth," said Toril Bosoni, head of oil industry and markets division, IEA.

India currently is the third largest consumer of oil behind the US and China. It imports 85% of its oil needs and this dependence is likely to rise as domestic production falls. Diesel, she said, accounts for about 50% of Indian gains and 20% of global demand growth to 2030.

The demand growth is despite the push for electric vehicles which make up for a small fraction of the automobiles on the road currently. The EV push will see greater adoption in two- and three-wheelers while their penetration in the four-wheeler segment would be around 5%