India among new engines of oil demand growth, IEA says

India is emerging as one of the world’s strongest engines of oil demand growth, the International Energy Agency (IEA) said on Wednesday, even as much of the industrialized world accelerates its shift toward cleaner energy systems.

In its World Energy Outlook 2025, the agency said “energy-market dynamics are increasingly shaped by a group of emerging economies, led by India and Southeast Asia and joined by countries in the Middle East, Latin America and Africa. Collectively they take up the baton from China.”

The shift marks a structural handover in oil consumption, with China’s once-dominant pull on global demand beginning to flatten out while new pockets of growth emerge across Asia.

The IEA’s central Current Policies Scenario shows global oil demand rising to around 113 million barrels a day by mid-century, about 13% higher than in 2024, and concludes that the world “is not yet at peak oil.”

Despite record investment in renewables, electric mobility and efficiency, hydrocarbons remain embedded deeply enough in transport, petrochemicals and heavy industry to keep global demand climbing for decades without stronger policy intervention.

India stands out within that landscape. According to the agency’s India Oil Market analysis, “India will become the largest source of global oil demand growth between now and 2030, accounting for more than one-third of the projected 3.2 million barrels per day global gains, to reach 6.6 million barrels per day by 2030.”

That makes India the single largest contributor to global demand growth this decade, outpacing all other economies at a time when consumption in advanced nations is falling and China’s growth curve is levelling off.

Much of this expansion is tied to India’s economic momentum. With gross domestic product (GDP) growing close to 7% a year, the country’s industrial output, road transport and petrochemical sectors are driving a broad and sustained rise in oil use.

A young population, rapid urbanization and an expanding middle class are reinforcing these trends, while airlines, freight networks and manufacturing hubs add further pressure on fuel demand.

The IEA notes that the “next phase of expansion in global oil demand will be anchored in South and Southeast Asia,” supported by strong demographics and fast-growing cities.

But it also highlights a strategic vulnerability for India: the country meets more than 85% of its crude requirement through imports, leaving it exposed to price swings and geopolitical shocks.

While India has set a target of reaching net-zero emissions by 2070 and is deploying renewables at one of the fastest rates worldwide, oil remains central to its near-term development.

The agency warned that although global supplies appear comfortable today, faster-than-expected demand growth “could quickly erode what buffers they have,” adding to the risk of volatility across oil and gas markets.

IEA Executive Director Fatih Birol said the convergence of old and new energy risks marks a “turning point for global energy security,” with vulnerabilities now spread across oil, natural gas, critical minerals and electricity grids.

He urged governments to take a more integrated view of the transition.

“Energy security is front and center for many governments,” he said. Their responses, he added, must consider “the synergies and trade-offs that can arise with other policy goals on affordability, access, competitiveness and climate change.”