India’s Oil Boom Braces for Slowdown as Demand Growth Cools in 2024

India’s Oil Boom Braces for Slowdown as Demand Growth Cools in 2024

The International Energy Agency (IEA) announced on Thursday that the rapid expansion of oil product consumption in India might be reaching a plateau.

According to the IEA’s monthly report, the anticipated growth in India’s oil product demand is expected to decelerate to 2.5% in the coming year, down from 4.1% in 2023.

While Indian oil product deliveries experienced a slight increase in November, the figures fell short of the usual seasonal upsurge, as noted by the agency. November deliveries saw a rise of 40,000 barrels per day (bpd), a stark contrast to the typical seasonal increment of 170,000 bpd.

Data from the Indian oil ministry’s Petroleum Planning and Analysis Cell (PPAC) revealed a decline in India’s fuel consumption for November following a four-month peak in the preceding month. The dip was attributed to reduced travel in the world’s third-largest oil consumer, as the festive boost tapered off.

The IEA forecasts a yearly increase of 220,000 bpd in 2023, with growth slowing to 110,000 bpd in the fourth quarter of the same year. Looking ahead to 2024, the IEA projects a growth rate of 140,000 bpd. While this would still represent the second-highest global growth, it pales in comparison to China’s impressive 710,000 bpd increase.