India Set to Lead Global Oil Demand Growth Through 2035, Amid Geopolitical Tensions
NEW DELHI – According to a recent report by the International Energy Agency (IEA), India is poised to become the primary driver of global oil demand growth through 2035, adding nearly 2 million barrels per day (mb/d) to the market. This shift comes as China, historically the engine of oil market growth, transitions towards electricity-driven energy usage1.
The report highlights that India’s growing energy needs will play a central role in shaping global oil markets. However, this increase in demand also brings significant geopolitical implications. As India’s oil consumption rises, it will likely lead to increased competition for resources, potentially heightening geopolitical tensions in key oil-producing regions2.
The Middle East, a critical supplier of oil, remains a hotspot for geopolitical conflicts. Approximately 20% of the world’s oil and liquefied natural gas (LNG) supplies pass through the Strait of Hormuz, a strategic chokepoint that has been the site of numerous geopolitical disputes1. Any disruptions in this region could have far-reaching consequences for global oil supply and prices.
Moreover, the transition to electric vehicles (EVs) in many countries is expected to reduce oil demand for road transport, but this decline is partially offset by increased oil usage in petrochemical production. This shift underscores the complex interplay between technological advancements, environmental policies, and energy security.
As India continues to expand its refining, petrochemical, and retail capacity, investments in these sectors are expected to remain high. This growth will not only bolster India’s economy but also influence global energy dynamics3. The IEA warns that major oil-producing nations may face an oversupply situation as spare crude oil production capacity rises, potentially leading to lower oil prices.
In conclusion, India’s rising oil demand presents both opportunities and challenges. While it drives economic growth and development, it also necessitates careful navigation of geopolitical landscapes to ensure energy security and stability.