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India’s oil demand to grow 4% to 5.8 mbd in 2025: OPEC

India’s oil demand is expected to grow to 5.80 million barrels per day in 2025, up 4.1% from the 5.57 million barrels per day projected in 2024, the Organisation of Petroleum Exporting Countries said. In its latest oil market report for the month, the cartel highlighted that the growing demand will be supported by increased consumption of gasoline and other petroleum products on the back of growing economic activity.

“Healthy economic momentum in 2024 is expected to continue into 2025. Manufacturing and business activities are expected to be steady, supporting oil demand growth of 227,000 bpd on year, to average 5.80 mbd,” OPEC said in its report.

Transportation and industrial fuels are expected to continue to drive demand, followed by bitumen. LPG (liquified petroleum gas) and naphtha are also expected to support oil demand over the year, the cartel said.

In the current year 2024 itself, the country is guided for a healthy oil demand growth of 228,000 barrels per day. OPEC also sees the current strong economic growth in the country to continue in the second quarter of 2024.

“Strong investment is expected to drive economic growth, together with an expansion in manufacturing activity with the government focusing on this sector to further support the economy amid an expected surge in construction. Overall, these factors are expected to bolster India’s oil demand in 2Q24,” the report said.

Additionally, the country’s gasoline demand is set to get a boost from the annual traditional festivities and increasing transportation activity. The ongoing air travel recovery is also anticipated to support jet and kerosene demand.

In March, the country’s oil demand grew by 169,000 barrels per day from the same period last year but slightly down from growth of 207,000 bpd seen in February. “The largest oil demand increase in March was recorded for LPG, which expanded by 77,000 bpd, up from growth of 47,000 bpd in February,” said the report.

Gasoline also grew by 59,000 bpd, up from an increase of 43,000 bpd seen the previous month supported by healthy mobility.

As per OPEC’s estimates, global oil demand in the first quarter of 2024 is expected to have grown by 2.4 million barrels per day on year. For 2024, the cartel anticipates total world oil demand to reach 104.5 million barrels per day. The growth will be supported by strong air travel demand and healthy road mobility, including trucking, as well as industrial, construction and agricultural activities in non-OECD (Organisation for Economic Co-operation and Development) countries, it said.

India’s crude imports in April averaged 4.9 million barrels per day, recovering by 8% from the decline seen in the previous month. The country’s product imports fell 13% amid lower inflows of LPG.
Source: Financial Express

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