Will India surpass China in oil consumption growth in 2024 and 2025?

Although consumption by this world’s third-largest crude oil importer slowed notably during the monsoon season, India’s oil demand growth has remained steadily robust—while China’s oil demand has declined this year. Analysts and forecasters believe India’s oil demand will continue rising for many years to come, driven by its strong economy, population growth, and an emerging middle class. This stands in sharp contrast to China—the recent leader in oil demand growth—whose structural shifts in transportation are slowing its growth rate. OPEC’s ‘World Oil Outlook 2050’ states that India, other Asian countries (excluding China), Africa, and the Middle East will be the primary sources of global oil demand growth over the coming years. Between 2023 and 2050, total demand from these four regions is projected to increase by 22 million barrels per day (bpd). By 2050 alone, India’s oil demand is expected to rise by 8 million bpd, whereas China’s is projected to grow by only 2.5 million bpd, according to OPEC. In the short term, Indian refiners are seeking financing to build new refineries. Amid above-average economic growth and a rapidly expanding middle class, Indian refiners aim to boost refining capacity to meet surging domestic fuel demand. For example, state-owned refiner Bharat Petroleum Corporation Limited (BPCL) is reportedly negotiating with major domestic banks for a loan of approximately $3.8 billion to expand the capacity of one of its refineries. Another state-owned refiner, Chennai Petroleum Corporation Limited (CPCL), is reportedly discussing a $3.33 billion (₹280 billion) loan with banks to help construct a refinery in Tamil Nadu, southern India. India’s Petroleum Minister Hardeep Singh Puri stated earlier this year that India also aims to become Asia’s refining hub, as it ramps up refining capacity and expects continued reliance on fossil fuels at least until 2040. Cross-verification across data sources In addition to the U.S. Energy Information Administration (EIA), we consulted two internationally renowned energy agencies’ December 2024 reports: the International Energy Agency’s (IEA) ‘Oil Market Report’ and OPEC’s ‘Monthly Oil Market Report’. These reports offer differing data and conclusions regarding projected oil consumption growth for China and India in 2024 and 2025. In its December 2024 ‘Oil Market Report’, the IEA forecasts China’s total oil consumption at 16.58 million bpd in 2024—up 140,000 bpd from 16.44 million bpd in 2023—and 16.79 million bpd in 2025—an increase of 210,000 bpd from 2024. Over the same period, India’s total oil consumption is projected at 5.61 million bpd and 5.83 million bpd, representing annual increases of 200,000 bpd and 220,000 bpd, respectively. From these figures, the IEA’s projection clearly indicates that India’s oil consumption growth in 2024 exceeded China’s; in 2025, although the gap narrows, India’s incremental growth remains slightly higher than China’s.

Indian refiners expect domestic fuel demand to grow by 5% annually.

G. Krishnakumar, Chairman of India’s state-owned refiner Bharat Petroleum Corporation Limited (BPCL), said on Friday that fuel demand in India—the world’s third-largest crude oil importer—will grow at an annual rate of 4% to 5% for the ‘foreseeable’ future. Meanwhile, according to Reuters, Krishnakumar told BPCL shareholders that consumption of petrochemical products in India is expected to grow even faster—by 7% to 8% annually—in the foreseeable future. To meet rising demand for refined products and petrochemicals, numerous Indian refiners plan to expand both their crude processing capacity and ethylene cracker units. Krishnakumar stated that BPCL intends to enhance its integrated refining and petrochemical capacity over the next five to seven years to keep pace with growing demand. Earlier on Friday, Bloomberg cited informed sources saying BPCL is negotiating with major domestic banks for a loan of approximately $3.8 billion, earmarked for expanding the capacity of one of its refineries.

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