India Crude Demand to Grow

India’s crude oil demand is forecast to grow to 500 million tons per year by 2040, but persistent increases in oil prices might act as a dampener for the rate of growth, Partha Ghosh, an executive director at Indian Oil Corp said on Tuesday. 

That would be equivalent to around 10 million barrels per day, up from about 4.7 million bpd in 2017, Business Standard reported.  

Globally oil demand will increase by 15.8 million bpd from now until 2040, Ghosh said. India’s growth of 5.9 million bpd will make up about 24% of the overall gain, he said. 

India’s refining capacity would increase to about 439 million tons per year by the financial year of 2030 as new and existing refineries continue enhancing their infrastructure, while domestic demand is forecast to increase to 356 million tons per year over the same period, Ghosh said. 

Higher refining capacity will mean India could export more refined oil products to countries in the region. 

“In the future, say about five to seven years down the line, when more refineries with bigger capacities come up, better export infrastructure will come along with that,” Ghosh, the executive director for optimization at Indian Oil Corp, the country’s biggest refiner, said on the sidelines the conference. 

“Then, it will be possible, even if the domestic demand does not grow because of high prices, refineries will be competitive enough to actually supply products to the entire region, be it East Africa or Asia.” 

India’s strong economic growth and the demographic advantage of having a pool of young people will remain key drivers in its energy demand growth. 

The rate of oil demand growth, however, will slow down by 2024 to 2025.