India is poised to overtake China as the leading source of growth in global crude oil consumption.
In 2024 and 2025, India will account for one-fourth of the growth in global oil demand, according to the US Energy Information Administration (EIA).
This marks a significant shift as India’s rising demand for transportation fuels and increased fuel consumption in households drive the country’s position as the world’s third-largest oil importer.
Growing Oil Consumption
The US EIA’s December Short-Term Energy Outlook (STEO) projects India’s growing role in global oil consumption, highlighting the country’s expected growth in both transportation fuels and cooking fuels.
“India has emerged as the leading source of growth in global oil consumption in 2024 and 2025, overtaking China this year,” the agency stated.
As India’s economy continues to expand, the demand for energy, particularly liquid fuels, is surging.
The forecast indicates that India will increase its crude oil consumption by 2,20,000 barrels per day (bpd) in 2024 and by 3,30,000 bpd in 2025.
The growth is the largest among all countries in the EIA’s projections.
China’s Slower Growth in Oil Consumption
In contrast, China’s oil consumption is expected to grow at a slower pace. After years of consistently outpacing India’s consumption growth from 1998 to 2023, China is now facing several challenges that are limiting its oil demand.
The rapid expansion of electric vehicle adoption, the increased use of liquefied natural gas in freight transport, a declining population, and slower economic growth have all contributed to lower oil consumption in China.
The growing use of oil in petrochemical manufacturing, rather than in transportation, now primarily drives China’s demand.
In 2024, China is expected to increase its oil consumption by 90,000 bpd. Analysts forecast a larger rise of 250,000 bpd for 2025.
Comparing Oil Consumption
Despite India’s faster growth, China still consumes far more oil in total. In 2023, India’s total oil consumption stood at 5.3 million barrels per day (mb/d), while China consumed more than three times that amount at 16.4 mb/d.
Although India is leading in growth rate and volume, China remains the dominant consumer of liquid fuels globally.
Global Oil Consumption Outlook
The EIA projects that global oil consumption will grow by 0.9 million barrels per day in 2024, with an even greater growth of 1.3 million bpd expected in 2025.
Thehindubusinessline.com reports that India’s rapid consumption growth will play a key role in this trend, positioning it as a central player in the future of global oil markets.
