According to Moody’s Ratings, India will overtake China as the main driver of global oil demand growth over the next decade. As China nears peak consumption, India’s expanding economy and infrastructure needs will steadily increase oil use.
China’s Oil Demand Approaching Its Peak
Moody’s forecasts that China’s crude oil consumption will peak in the next three to five years, reaching around 800 million tons annually by 2030. This plateau is attributed to slowing economic growth and the rapid shift towards new energy vehicles.
China’s transition is already well underway, with the widespread adoption of electric and hybrid vehicles and aggressive expansion of renewable energy capacity. These structural changes are steadily reducing demand for traditional fuels like gasoline and diesel. However, demand for jet fuel and naphtha is expected to grow due to rising air travel and increased petrochemical output.
India’s Oil Demand to Grow 3–5% Annually
India offers a contrasting trajectory. Moody’s projects that the country’s oil demand will rise by three to five percent annually through 2030. This growth will be powered by ongoing economic expansion, large-scale industrialisation, and heavy public investment in infrastructure. Urbanisation, improved transport access, and rising consumption across sectors are further reinforcing India’s oil demand.
Refining Capacity Limits China’s Growth
China’s refining capacity has nearly hit the government-imposed cap of one billion tons per year, limiting the country’s ability to process additional crude oil and further slowing future demand growth.
Import Dependency: A Growing Challenge for India
Both China and India rely heavily on energy imports, but India’s dependence is notably higher. China imports over 70% of its crude oil and 35–40% of its natural gas needs. India, by comparison, imports about 90% of its crude oil and 50% of its natural gas.
Moody’s expects China’s import reliance to ease slightly as demand slows and domestic shale and offshore production rises. Meanwhile, India risks higher import dependency unless it boosts exploration and tackles declining output from aging wells.
Outlook: India Takes the Lead in Global Oil Growth
According to knnindia.co.in, India is set to take centre stage in the global oil market as China’s oil demand nears its peak. Its sustained growth in transportation, industry, and urban development positions it as the new engine of oil demand through the next decade. However, managing import dependency will be critical for maintaining energy security amid this rising consumption.
