India, accounting for one-fourth of the growth in global crude oil consumption, is expected to surpass China as the major source of growth in the current calendar year and the next.
According to the US Energy Information Administration (EIA), rising demand for transport fuels as the domestic economy expands as well as growing fuel consumption in Indian kitchens is propelling the growth for the world’s third largest importer.
“India has emerged as the leading source of growth in global oil consumption in 2024 and 2025, overtaking China this year, according to our December Short-Term Energy Outlook (STEO),” the US government agency said.
China’s oil consumption grew more than India’s in almost every year from 1998 through 2023, with its oil consumption regularly growing more than any other country during those years, it added.
“Over 2024 and 2025, India accounts for 25 per cent of total oil consumption growth globally. We expect an increase of 0.9 million barrels per day (mb/d) in global consumption of liquid fuels in 2024. We expect even more growth next year, with global oil consumption increasing by 1.3 mb/d,” the US EIA projected.
Driven by rising demand for transportation fuels and fuels for home cooking, consumption of liquid fuels in India is forecast to increase by 220,000 b/d in 2024 and by 330,000 b/d in 2025. That growth is the biggest among all countries in the US EIA’s forecast in each of the years, it added.
“We forecast China’s liquid fuels consumption will grow by 90,000 b/d in 2024 before increasing by 250,000 b/d in 2025. In China, rapidly expanding electric vehicle ownership, rising use of liquefied natural gas for trucking goods, a declining population, and decelerating economic growth have limited consumption growth for transportation fuels,” it said.
Most of the growth in China is the result of increasing oil use for manufacturing petrochemicals, the agency added.
“Although India’s growth in percentage and volume terms exceeds China’s growth in our forecast, China still consumes significantly more oil,” it said.
Total consumption of liquid fuels in India was 5.3 mb/d in 2023, while China consumed more than triple that amount at 16.4 mb/d in 2023, based on estimates in US EIA’s December STEO, the agency pointed out.
