Page 4 - Policy Economic Report_Feb'25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

The Policy and Economic Report – Oil & Gas Market (February 2025) presents a detailed analysis of the
global and Indian energy sectors, covering crude oil, natural gas, macroeconomic trends, and significant
policy developments. The report provides insights into key energy market dynamics, demand-supply
patterns, pricing trends, and government initiatives that shape the sector.

Global Economic Overview

The global economy is projected to grow at 2.8% in 2025 and 2.9% in 2026, with inflation expected to
decline further. Global headline inflation is forecast to reach 4.2% in 2025, supported by easing
commodity prices and monetary policy adjustments by major economies. However, ongoing geopolitical
tensions, trade restrictions, and climate risks remain key challenges to sustained economic recovery. The
crude oil market continues to be impacted by fluctuating demand, production cuts by OPEC+, and volatility
in global trade routes.

India’s Economic Performance

India’s economy continues to exhibit resilience, with GDP growth at 6.2% in Q3 FY25, supported by robust
domestic consumption and government-led infrastructure investments. The fiscal deficit remains at 5.9%
of GDP, while exports grew by 6%, driven by an 11.6% increase in services exports. India’s foreign
exchange reserves stood at $640.3 billion, covering 10.9 months of imports. The banking sector has shown
stability, with non-performing assets (NPAs) declining to 2.6%, the lowest in over a decade. Credit
expansion has remained strong, further supporting industrial and economic growth.

Global Crude Oil Market

Crude oil prices witnessed fluctuations in January due to supply chain disruptions and geopolitical
uncertainties. Brent crude averaged $77.84 per barrel, while WTI crude stood at $75.20 per barrel. The
global oil demand is expected to grow by 1.4 million barrels per day (mb/d) in 2025, largely driven by non-
OECD economies, particularly in Asia. Production from non-OPEC+ (Non-DoC) countries is forecast to rise
by 1.0 mb/d in 2025, with the U.S., Brazil, Canada, and Norway leading supply growth. OPEC+ continued
its production adjustments to stabilize prices, while refinery margins improved due to strong global
demand for petroleum products.

Indian Oil & Gas Market

India’s crude oil production in January 2025 was 2.5 million metric tonnes (MMT), reflecting a 1.2% decline
year-on-year (YoY). However, crude oil processing increased by 5.2% YoY to 23.7 MMT, indicating higher
refinery activity. Petroleum product consumption remained robust, with diesel demand rising 4.2% YoY
(7.74 MMT), petrol up 6.7% YoY (3.31 MMT), and LPG demand growing 5.4% YoY (2.84 MMT). India
continues to expand its refining capacity and has increased crude oil imports from diverse sources to
enhance energy security.

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