Page 22 - Policy Economic Report - December 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

The ministry also noted that it will also help in standardizing warehousing and other logistics assets to
strengthen supply chains and incentivize greater private sector investment, improving efficiencies in
external trade logistics and adopting smart systems for efficient and low emission logistics.

The development of India's logistics sector is vital to enhancing the competitiveness of its manufacturing
sector. Through strategic policy reforms, infrastructure development, and digital integration, ongoing
reforms are poised to transform the logistics landscape.

8. India to drive global oil demand growth till 2035: IEA Report

India is set to lead global oil demand growth until 2035, according to a recent report by the International
Energy Agency (IEA).

The report highlighted that India will add nearly 2 million barrels per day (mb/d) to global oil demand
during this period, making it the primary growth driver of the entire industry. This shift comes as China,
which has historically been the engine of oil market growth, transitions towards electricity-driven energy
usage. The report noted that China's oil consumption for road transport is projected to decline due to the
rise of electric vehicles. However, this decline is partially offset by increased oil usage in petrochemical
production.

Globally, the growth in oil demand is slowing down under the Stated Policies Scenario (STEPS), which is
causing significant challenges for major oil- producing nations. These resource owners may face an
oversupply situation as spare crude oil production capacity is expected to rise to 8 mb/d by 2030.

Additionally, a significant transformation is underway in the transport sector. The report stated that over
the past decade, road transport has driven oil demand growth by 4.2 mb/d, contributing to nearly half of
global oil demand growth.

However, this trend is reversing, with oil demand for passenger cars expected to decline by 1 mb/d by
2030. This change is a major factor behind the anticipated peak in global oil demand by the end of this
decade under the STEPS.

9. India to surpass China as the top source of global oil consumption growth in 2024 and 2025

India has emerged as the leading source of growth in global oil consumption in 2024 and 2025, overtaking
China this year, according to December Short-Term Energy Outlook (STEO). China’s oil consumption grew
by more than India’s in almost every year from 1998 through 2023, with China’s oil consumption regularly
growing more than any other country during those years.

Over 2024 and 2025, India accounts for 25% of total oil consumption growth globally. It is expected that
there will be an increase of 0.9 million barrels per day (b/d) in global consumption of liquid fuels in 2024
and global oil consumption will also increase by 1.3 million b/d.

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