India is set to become the primary driver of global oil consumption growth for the years 2024 and 2025, surpassing China, which has historically led this growth for over two decades, according to the latest report from the U.S. Energy Information Administration (EIA).
India’s demand for oil is expected to account for a quarter of global consumption growth in the next two years. In 2024, global liquid fuel consumption is projected to increase by 900,000 barrels per day (b/d), with a further 1.3 million b/d increase forecast for 2025. Of this, India is anticipated to contribute significantly, with consumption rising by 220,000 b/d in 2024 and 330,000 b/d in 2025 — the largest increase among all countries in the EIA’s projections.
The surge in India’s oil demand is largely driven by the growing need for transportation fuels and fuels for home cooking, sectors that continue to see rising demand. In contrast, China’s consumption growth is more modest, expected to increase by 90,000 b/d in 2024 and 250,000 b/d in 2025. The slowdown in China’s consumption growth is attributed to factors such as the rapid adoption of electric vehicles, the increasing use of liquefied natural gas (LNG) for trucking, a declining population, and slower economic growth. While oil demand in China remains significant, much of the growth in consumption is linked to its petrochemical manufacturing sector.
Despite India’s stronger growth in both percentage and volume terms, China remains the world’s largest oil consumer. In 2023, India’s total consumption stood at 5.3 million b/d, while China’s consumption was over three times higher at 16.4 million b/d.
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