India’s oil demand growth is expected to surpass China’s for the first time in 2024 and continue into 2025, according to industry experts. Kang Wu, global head of macro and oil demand research at SPGCI, reports that India’s oil demand increased by 180,000 barrels per day (bpd) this year, outpacing China’s growth of 148,000 bpd. Looking ahead, India’s oil demand is forecast to grow by 3.2% in 2025, compared to China’s 1.7%.
For years, China has driven much of the global demand for oil, fueled by its rapid economic growth. However, this trend is now shifting. The factors that have supported China’s booming economy since the global financial crisis, particularly in real estate and local government investments, are unlikely to continue in the coming decade. China’s economic slowdown has been especially evident in the property sector, which once contributed up to 25% of the nation’s GDP.
This shift means China is poised to lose its dominant role in global oil markets. Emma Richards, senior analyst at Fitch Solutions, told The Times of India that China’s role as a key driver of global oil demand is quickly fading. Over the next decade, China’s share of oil demand growth in emerging markets is expected to drop from nearly 50% to just 15%, while India’s share will rise to 24%.
Several factors contribute to this change, including China’s strong push for electric vehicles (EVs), which is expected to reduce its oil demand faster than India’s. In 2022, China sold 6.1 million EVs, compared to only 48,000 in India. While China is aggressively pursuing clean energy alternatives, India is not as focused on reducing its dependence on fossil fuels. In fact, India’s coal minister, Pralhad Joshi, stated last year that the country has no plans to phase out coal from its energy mix in the near future. He emphasized that coal would remain a key energy source for India until at least 2040, calling it an affordable and essential fuel for the country’s growing demand.
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