India is set to become a major force in global oil consumption, surpassing China by 2030. Last year, India recorded a historic high in petroleum use, driven by urbanization, industrialization, and the expanding middle class. The surge in consumption includes petroleum products for heating, lighting, cooking, transportation, and petrochemicals.

Unlike China, where electric vehicles fulfill a growing share of transportation needs, India still relies heavily on internal combustion engines due to their affordability. While China's oil consumption is expected to peak and decline by the end of the decade, India's is projected to continue rising throughout the 2030s.

Currently the second-largest driver of global incremental consumption, India is poised to claim the top spot before 2030, with its economic growth becoming a key factor influencing global consumption and prices.

In 2023, India's petroleum consumption reached 231 million tonnes, up from 219 million tonnes in 2022, despite the disruptions caused by the COVID-19 pandemic. The growth was only 6 million tonnes shy of the pre-pandemic trend for 2015-2019.

Comparatively, both India and China experienced compound annual consumption growth rates of around 3.5% between 2012 and 2022, contrasting with the global average of 0.5% per year during the same period.

Although China began the 2010s with oil consumption almost three times that of India, the similar growth rates mean that India's absolute increases will catch up and likely surpass China's in the coming years, especially as China's adoption of electric vehicles slows consumption growth.

India's share of global oil consumption rose to over 5% in 2022, up from 4% in 2021 and 3% in 2002. By 2030, India's crude oil imports and fuel consumption are anticipated to command nearly as much attention from analysts as China's did a decade ago.

Last year, India's petroleum consumption grew by over 5%, exceeding the average of the previous decade. However, the rapid growth in the first nine months slowed during the fourth quarter, contributing to a decline in oil prices towards the end of 2023. This trend foreshadows the more significant impact India is expected to have on the global oil market in the coming years.

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