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New Delhi, May 23 (KNN) India is set to become the primary driver of global oil demand growth over the next decade, replacing China as the world’s second-largest oil consumer nears peak consumption, according to a new analysis by Moody’s Ratings.
China’s crude oil consumption is expected to reach its peak within the next 3-5 years at approximately 800 million tonnes per annum by 2030, driven by slower economic growth and accelerated adoption of new energy vehicles.
In contrast, India is projected to maintain annual oil demand growth of 3 to 5 percent during the same period, supported by continued economic expansion and infrastructure development.
The rating agency attributes China’s demand moderation to several structural factors, including the rapid penetration of electric and hybrid vehicles in the transportation sector and the expansion of renewable energy capacity.
These developments are reducing China’s reliance on traditional petroleum products such as diesel and gasoline, though demand for jet fuel and naphtha is expected to increase due to growing air travel and petrochemical production.
China’s refining capacity has approached the state-mandated ceiling of one billion tonnes, effectively limiting further crude oil demand growth.
India presents a contrasting scenario, where accelerating economic growth, rapid industrialisation, and substantial government infrastructure investments are expected to drive the country’s transportation fuel demand.
Growing urbanisation and improved accessibility are also contributing to sustained petroleum product consumption across multiple sectors.
Import dependency remains a critical consideration for both nations.
China currently imports more than 70 percent of its crude oil requirements and 35-40 percent of its natural gas needs.
India’s import reliance is more pronounced, with approximately 90 percent of crude oil and 50 percent of natural gas sourced internationally.
Moody’s analysis indicates that China’s import dependency will likely decrease due to slower demand growth and enhanced domestic production capabilities, particularly through investments in complex shale gas and offshore projects.
India’s import reliance is expected to increase unless the country successfully addresses declining domestic production from aging wells and accelerates new exploration investments.
(KNN Bureau)
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