While India plans to move towards a gas-based economy, Organization of the Petroleum Exporting Countries (OPEC) secretary general Mohammed Barkindo feels oil demand growth to shift increasingly to India. Speaking at the India Energy Forum by CERAWeek, Barkindo said India’s oil production will rise 150% by 2040 to 10.1 million barrels per day.
He also said India’s share of global oil demand is expected to rise in excess of 9% by 2040, up from 4% now.
The comments come a couple of days after India’s petroleum minister Dharmendra Pradhan reiterated its demand to be provided oil at a lower rate given the market at present is demand-driven.
The OPEC chief expects oil product demand worldwide to grow by 1.5 million barrels per day in 2017 and by 1.4 million barrels per day in 2018.
However, reduced capital expenditure by oil producers due to depressed prices is likely to affect India as independent producers have reduced spending by 50%.
At the same time, Barkindo urged shale oil producers to assist in curtailing global oil supply which is affecting prices, and warned extraordinary measures might be needed next year to sustain the rebalanced market in the medium to long term.
“Demand-supply is returning to rebalance through massive destocking that we have been witnessing of stocks in OECD across regions in a very massive way,” said Barkindo adding in the past four months alone, destocking to the tune of 130 million barrels per day has been achieved.
The OPEC aims to cut oil in OECD countries compared with the five-year supply average. As per Barkindo, the stock overhang to the five-year average stood at 171 million barrels in August compared with 338 million at the start of 2017.
Barkindo also indicated that it is open induct more members to OPEC.