RoydadNaft –  India, the world’s third largest oil importing and consuming nation, will be the new epicentre of oil demand growth over the next decade. Among emerging markets and developing economies, India’s demand in the energy sector grows the fastest, up by 3 per cent each year on average to 2035, the International Energy Agency (IEA) said on Wednesday in its latest Global Energy Outlook.

The Paris-based agency, however, said that India’s growing appetite for energy will outpace that of China and Southeast Asia combined, underscoring its pivotal role in shaping global oil markets. “Oil remains the dominant fuel to 2050 in the CPS (current policies scenario). China accounted for more than 75 percent of oil demand growth over the past ten years, but this picture is changing, and India becomes the new epicentre of growth in oil demand,” the IEA said.

India would account for the largest increase in global oil consumption through 2035, driven by rapid economic expansion, industrialisation and rising vehicle ownership. “India leads global oil demand growth over the next ten years, with almost half of the additional barrels produced globally to 2035 heading in its direction,” it said.

As per the report, India’s oil use increases from 5.5 million barrels per day (mbpd) in 2024 to 8 mbpd in 2035 as a result of rapid growth in car ownership, increasing demand for plastics, chemicals and aviation, and a rise in the use of liquefied petroleum gas (LPG) for cooking. “Oil demand in India increases by 2 mbpd to 2035 – the largest increase in any country – and continues to rise through to 2050. The next largest increases to 2035 are in Africa (1.2 mbpd), and Southeast Asia (1 mbpd),” the IEA said.

With limited domestic production, India’s dependence on imports to meet this rising demand will only increase. The IEA has projected that import dependency in India rises from 87 per cent in 2024 to 92 per cent in 2035, despite government efforts to promote domestic production. While India is import dependent for crude oil – the raw material that is processed in refineries and turned into fuels like petrol and diesel – it is not just self-sufficient in refining capacity but also has exportable surplus.

Around 9 mbpd of new refining capacity comes online globally between 2024 and 2035. “With around 5 mbpd in closures over this period, net refining throughput increases by 4 mbpd. Asia sees a net increase of around 3 mb/d in refining capacity between 2024 and 2035, led by increases in India,” it said.

“Since 2022, India has emerged as a global swing supplier, refining volumes of Russian crude oil exports that previously flowed to Europe. India’s refining capacity grows from 6 mbpd in 2024 by 1.5 mbpd to 2035 which solidifies its role as a key exporter of transport fuel,” it added.

Stating that coal production declines in all major producing countries except India to 2035, the IEA also pointed out that coal production in the country increases by around 50 million tonnes of coal equivalent (Mtce) to 2035 as it pursues its long-term strategy of reducing coal imports and enhancing energy security. “Coal production reached almost 600 Mtce in 2024, an increase of nearly 100 Mtce since 2022. This falls short of the increase of around 75 Mtce in its demand for coal over the period, but it helps to limit growth in coal imports,” it added.