India’s oil demand is expected to grow more than any other nation and will account for over 12% of the world’s energy demand by 2050, up from 7% in 2023, BP’s chief economist Spencer Dale said on Monday while presenting the bp energy outlook for 2025.
Dale projects the country’s oil demand to grow to 9.1 million barrels per day by 2050 from 5.4 mbd in 2023 and that of natural gas to more than double to 153 billion cubic meters from 63 bcm in 2023. Industrial demand for gas is the key growth driver, he noted.
What did Dale say?
He highlighted that for India, increasing domestic oil and gas production, along with accelerating the electrification of operations backed by coal and renewables, will be crucial for strengthening the country’s resilience amid geopolitical uncertainties and supply disruptions.
“India’s economy grows at a rate of 5% per year in 2023-2050, double the rate of growth of the global economy. The primary energy consumption grows strongly and by 2050, India will account for 12% of the world’s demand, up from 7% in 2023,” Dale said.
The country is the third largest importer of oil and fourth largest LNG importer.
“India is one of the fastest growing energy markets in the world. Its demand for energy is growing more quickly than anywhere else, and it is going to need more of all types of energy,” Dale said. He added that while the share of renewable sources grows, demand for fossil fuels will remain.
Speaking on how geopolitics would shape the energy demand, Dale noted that increased geopolitical fragmentation will lead to greater energy differentiation and countries will react differently to it.
Global energy trends
As per the outlook, global oil consumption continues to grow over the rest of this decade, at a declining rate, before edging back to around its current level by 2035.
The rise in global demand is supported by increasing use in India and other emerging Asian countries as their economies continue to grow rapidly, partially offset by continuing declines in developed markets.
“In India, oil continues to grow through the early part of the 2030s and it plateaus around six and a half million barrels a day and then starts to decline,” Dale said adding natural gas also continues to grow through this decade and then starts to decline.
As per BP’s Energy Outlook 2025, renewable energy is seen growing strongly in India driven by solar and wind. However, coal remains India’s largest source of energy.
“In current trajectory, coal remains India’s largest source of energy, with its share in the energy mix staying above 40% in 2050. However, in Below 2-Degrees, coal’s share drops sharply to 16%.”