Supported by a healthy economic growth, India’s demand for oil products, including petrol and diesel, is expected to go up by 7.7% to 4.77 million barrels per day (mb/d) in 2022, the Organization of the Petroleum Exporting Countries (OPEC) has forecast. During the year, oil demand is likely to increase by 1.23% in China, 3.39% in the US and 4.62% in Europe. Globally, the demand will go up by 3.2%. Pegged at 7.7%, India’s rise is expected to be the fastest in the world. In 2021, India’s demand for oil products was 4.77 mb/d. It may grow 4.67% in 2023 to 5.38 mb/d over 2022, the OPEC said in its latest monthly report.
The OPEC kept India’s economic growth forecast unchanged at 7.1% in 2022 and 6% in 2023, even as it revised growth rates of China and Japan to 4.5% and 1.4%, respectively, for the current year. Backed by rising momentum in economic activities, oil demand in India remained healthy at 0.7 mb/d, about 16% y-o-y growth in June, after an annual growth of 0.8 mb/d in May. Quoting secondary sources, the organisation said India’s crude imports edged higher averaging 4.7 mb/d in June with Russian flows up 0.9 mb/d y-o-y.
“Crude inflows were marginally higher month-on-month, but showed a stronger gain year-on-year (y-o-y) of 21%, or 0.8 mb/d. In terms of crude imports by source, Kpler data shows Russia moving up to be the top supplier of crude to India in June, securing a 24% share. Iraq fell to second with a share of 21%, followed by Saudi Arabia which was stable at 15%,” it said. Looking ahead, in the third quarter (July-September) of the current fiscal year, oil demand in India will remain at 0.3 mb/d annually, supported by healthy economic growth of 7.1%, continuing economic reopening amid ease of Covid-19 restrictions and easing of trade-related bottlenecks. However, the demand for oil is not expected to exceed the Q2’21 growth levels, partly affected by the late arrival of the ongoing monsoon season…” OPEC said.
“By Q4’22 demand will pick-up during the festival and holiday season in India, and oil demand will continue to grow by 0.3 mb/d, annually, despite the slowdown in driving during the winter. Overall, based on the most recent trends, demand for diesel and jet kerosene would likely account for a bigger part of the growth in demand in H2 as consumption of these two products had fallen sharply due to the pandemic,” OPEC said. In 2023, on an average, oil demand is expected to remain moderately at 0.2 mb/d, annually. In Q1’23, demand is expected to be aided by strong GDP growth of 6% y-o-y, steady manufacturing sector requirements and increasing road transport demand for distillates.
Additionally, increasing mobility and air travel improvements will back demand for transportation fuels. In Q1’23, both gasoline and jet fuel demands will immensely be favoured by increase in mobility activities. Finally, petrochemical industry and residential requirements for light distillates will aid the demand for naphtha and LPG in Q1’23. In both Q1’23 and Q2’23, oil demand is expected to grow at an average of 0.2 mb/d, annually.