Summary
- India is expected to surpass China as the top source of global oil consumption growth in 2024 and 2025
- China saw high oil consumption in 2023 due to manufacturing petrochemicals, but growth is forecasted to be minimal in 2024
- India’s oil consumption is projected to increase significantly, accounting for 25% of global oil consumption growth over the next two years
- China still consumes significantly more oil than India, despite India’s faster growth in oil use
- The US market’s oil consumption growth will depend on economic conditions, with potential impacts from tariff wars and economic shocks
Article
The US Energy Information Administration recently released an article discussing the growth of oil consumption in India compared to China. According to their data, India is expected to surpass China as the top source of global oil consumption growth in 2024 and 2025. While China experienced a boom in oil consumption in 2023, it is forecasted to grow minimally in 2024. On the other hand, India is projected to account for 25% of total oil consumption growth globally over the next two years, driven by rising demand for transportation fuels and fuels for home cooking.
Despite the significant growth in oil consumption in India, the country has been lagging behind in vehicle electrification, which is a cause for concern. With a high reliance on liquid fuels for cooking and an increase in their use, it appears that India may struggle to reverse these trends anytime soon. On the other hand, China’s forecast for 2025 is uncertain, as factors like electric vehicles, slowing economic growth, and potential population decline could impact the country’s oil consumption. It is important to note that the forecasted growth in oil use in China may not be as high as predicted by the EIA.
While China has made progress in cutting oil consumption growth, it still consumes a significant amount of oil compared to India. Despite India’s faster growth in oil consumption, China still consumes over three times the amount of liquid fuels as India. The United States market, on the other hand, is dependent on its economic growth trajectory. Whether the US economy continues to rebound and grow or faces challenges will determine the future of its oil consumption patterns.
Looking ahead to 2025, there are uncertainties surrounding the global oil consumption landscape. Changes in economic conditions, geopolitical tensions, and advancements in electric vehicles could significantly impact oil usage in various countries. It is essential for policymakers and industry leaders to consider sustainable alternatives to fossil fuels in order to reduce reliance on oil and mitigate the environmental impact of consumption. Moving forward, it will be crucial for countries like India to prioritize vehicle electrification and explore cleaner energy options to address their growing demand for oil.
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