India is gearing up for a significant surge in oil demand, set to outpace even China’s growth in the coming years. According to OPEC’s latest global outlook, India’s oil demand is expected to skyrocket from 5.55 million barrels per day in 2024 to 5.74 million bpd in 2025, with a further increase to 5.99 million bpd in 2026. This growth is fueled by the country’s rapidly expanding economy and rising energy needs, making it the fastest-growing economy in the world. In comparison, China’s oil demand is projected to grow by only 1.5% in 2025 and 1.25% in 2026, lagging behind India’s impressive growth rates.
The United States remains the largest oil consumer globally, with a demand of 20.5 million bpd in 2025, followed by China with 16.90 million bpd in 2025 and 17.12 million bpd in 2026. India holds the third spot in oil consumption. Despite slower growth rates, OPEC forecasts a steady rise in global oil demand by 1.3 million bpd in both 2025 and 2026. The organization attributes India’s robust economic growth to ongoing consumer spending, investments, and government support in key sectors. While recent US tariffs may impact India’s GDP growth, fiscal and monetary stimulus measures are expected to offset these effects, indicating positive signs for steady oil demand in the country.
In 2025, India’s oil product demand is anticipated to increase by 188,000 bpd, reaching an average of 5.7 million bpd. The demand for diesel is expected to be the primary driver of growth, supported by extensive road expansion projects. Additionally, strong growth in transport fuels, manufacturing, and petrochemical feedstock requirements will contribute to overall oil demand growth. Looking ahead to 2026, ongoing trade negotiations may mitigate the impact of announced tariffs, with oil demand projected to grow by 246,000 bpd year-on-year, averaging 6.0 million bpd. India’s heavy reliance on imports to fulfill its crude oil needs, coupled with record-high crude imports in March, highlights the country’s dependence on external sources for fuel production.
Not really sure why this matters, but India’s crude imports in March saw a significant increase, with Russia accounting for 36% of total imports, up from 31% the previous month. Iraq and Saudi Arabia followed closely behind, with 17% and 11% shares, respectively. The OPEC report also notes a 2% month-on-month rise in product imports, driven by higher LPG inflows, while product exports experienced a slight decline of almost 3% month-on-month. Despite fluctuations in product trade, India’s oil demand is expected to continue its upward trajectory, supported by strong economic growth and thriving manufacturing and service sectors.