India is set to surpass China in oil demand growth by the end of 2024, positioning itself as one of the fastest-growing consumption hubs in the global oil market, according to a new report by S&P Global Commodity Insights. The trend is expected to continue into 2025, prompting Indian refiners to ramp up expansion plans and diversify their crude sourcing strategies to meet the rising demand.
While China’s oil demand growth will slow, the country’s sheer market size—three times larger than India’s—will continue to contribute significantly to global oil consumption. However, industry experts are increasingly focusing on India, anticipating that its peak demand will occur much later than China’s. This shift is fueling India’s rise as a key player in the global oil landscape.
“India, along with Southeast Asia and other parts of South Asia, will be the primary drivers of future oil demand growth in the region,” said Kang Wu, the global head of macro and oil demand research at S&P Global Commodity Insights.
Forecasts for 2025 show India leading global demand growth with a 3.2% increase, compared to China’s 1.7%. Wu also highlighted the significant role petrochemical feedstock requirements will play in oil consumption growth in both countries next year.
In the first ten months of 2024, India’s oil demand surged by 180,000 barrels per day (b/d), or 3.2%, year-over-year, far outpacing China, which saw an increase of just 148,000 b/d, or 0.9%. These figures reflect India’s accelerating pace in oil consumption and underscore its growing prominence in the global market.
As India’s oil demand continues to rise, the country is also set to see significant growth in refining capacity. India’s first greenfield integrated refinery complex in nearly a decade is expected to launch in the coming months. The HPCL Rajasthan Refinery Ltd., an integrated refinery and petrochemical complex under construction in Rajasthan, is already in the pre-commissioning phase. The facility will process over 83% imported medium-grade crude, with the remaining portion sourced from domestic supplies. This refinery, once fully operational, is expected to generate incremental feedstock demand of up to 9 million metric tons annually.
As the global oil market adapts to shifting demand patterns, all eyes are on India, whose growing influence will be a key factor in driving future global oil consumption.