India's oil demand is expected to grow at the fastest pace among major economies and double the rate of rise in China in 2025
Credit: Reuters photo
New Delhi: Amid sluggish demands from the major economies - China and the US - India is expected to play an increasingly pivotal role in the global energy dynamics with strong demands this year, experts at S&P Global Commodity Insights said on Wednesday.
“For India, oil demand continues to grow, helped by favourable demographics and economic growth. India is quickly assuming a prominent place in the global oil demand growth order, while the base is still small to have an oversized implication on the global markets,” said Pulkit Agarwal, Head of India Content at S&P Global Commodity Insights.
He said while the Chinese demand has slowed, the market is now turning to India to lead future oil consumption growth. “Global oil prices have lost some shine in 2025 Year-to-date on the back of a challenging demand environment exacerbated by supply growth from OPEC+ as well as beyond,” Agarwal said.
Referring to S&P Global estimates, Gauri Jauhar, Executive Director, Energy Transition & Cleantech Consulting, S&P Global Commodity Insights, said, India will transition to an upper middle-income economy by the mid-2030s and will be adding urban population close to the size of the current US by 2050.
“India is riding the global energy transition wave, while navigating the energy demand of economic ascent, an urban surge and contending with high pollution levels,” Jauhar said.
Meanwhile, India also faces high pollution levels as reflected in particulate matter PM2.5 levels. With coal, along with renewables, representing India’s resource abundance, there is a natural fossil fuel imprint led by coal in power and oil and gas in other core sectors, she added.
“In a world plagued with slowing consumer demand, uncertainty over tariffs, tighter margins and over-capacity, global petrochemical producers are betting on India as a key demand driver in 2025. India’s petrochemical demand is likely to outpace GDP growth in 2025-26, despite concerns over a drop in urban demand and inventory build-up seen in the domestic markets amid tariff concerns,” said Stuti Chawla, Associate Director, India and Middle East Chemicals Pricing, S&P Global Commodity Insights.