India is emerging as one of the world’s strongest drivers of oil demand growth, according to the International Energy Agency (IEA), even as industrialized nations accelerate the shift toward cleaner energy. In its World Energy Outlook 2025, the IEA highlighted that energy-market dynamics are increasingly shaped by a group of emerging economies, led by India and Southeast Asia, with support from the Middle East, Latin America, and Africa. Collectively, these regions are taking over the growth baton from China, whose oil demand growth is now plateauing.
Structural Shift in Global Oil Consumption
The IEA notes a structural handover in global oil demand. While China’s influence on consumption has flattened, new growth pockets are emerging across Asia. Under the Current Policies Scenario, global oil demand is projected to rise to around 113 million barrels per day by mid-century, approximately 13% higher than 2024, indicating that the world has not yet reached peak oil.
Record investment in renewables, electric mobility, and efficiency has not displaced hydrocarbons, which continue to drive transport, petrochemicals, and heavy industry and keep demand on a long-term upward trajectory unless governments implement stronger policy interventions.
India Leads Global Oil Demand Growth
India stands out as a key driver of future demand. According to the IEA’s India Oil Market analysis:
*India will contribute more than one-third of the projected 3.2 million barrels per day global gains by 2030
*Total demand is expected to reach 6.6 million barrels per day by 2030
This makes India the largest single contributor to global oil demand growth this decade, outpacing other economies while consumption in advanced nations declines and China’s growth plateaus.
Factors Driving India’s Oil Demand
Several factors underpin India’s robust demand growth:
*Strong economic momentum: GDP growth near 7% annually drives industrial output, transport, and petrochemical consumption
*Demographics and urbanization: A young population, expanding middle class, and rapid urban growth increase energy needs
*Transport and logistics: Airlines, freight networks, and manufacturing hubs intensify fuel requirements
The IEA emphasizes that strong demographics and rapid urban expansion will anchor the next phase of global oil demand growth in South and Southeast Asia.
Strategic Vulnerabilities
India’s rapid oil demand growth also carries strategic risks:
*The country imports over 85% of its crude oil, making it vulnerable to price swings and geopolitical shocks
*While India targets net-zero emissions by 2070 and rapidly deploys renewables, oil remains central to near-term economic growth
As reported by the pressinsider.com, the IEA warns that even though global supplies appear adequate today, faster-than-expected demand growth could strain existing buffers, increasing volatility in oil and gas markets.
A Turning Point for Global Energy Security
IEA Executive Director Fatih Birol highlighted that the convergence of old and new energy risks marks a turning point for global energy security. Vulnerabilities now span:
*Oil and natural gas markets
*Critical minerals
*Electricity grids
He urged governments to adopt a more integrated approach to the energy transition, considering the synergies and trade-offs between energy security, affordability, access, competitiveness, and climate goals. “Energy security is front and center for many governments,” Birol said, emphasizing the need for coordinated policy frameworks to manage both energy transition and economic growth effectively.
