In May 2025, Vienna (Austria)-based Organisation of the Petroleum Exporting Countries (OPEC) released its latest Monthly Oil Market Report (MOMR) for May 2025. The report projected that India’s oil demand is expected to increase by 3.39%, from 5.55 million barrels per day (bpd) (in 2024) to 5.74 million bpd (in 2025), driven by rising energy needs in the world’s fastest growing economy. It is further projected to increase by 4.28% i.e. to 5.99 million bpd (in 2026).
- This growth estimate of India is expected to outpace China’s projected 1.5% and 1.25% increase in 2025 and 2026, respectively.
- India ranked third in terms of absolute oil consumption globally after the United States of America (USA) and China.
Key Findings:
i.The report cited that the United States of America (USA) will continue to be the world’s top oil consumer, with a projected demand of 20.5 million bpd (in 2025). However, the USA is likely to witness marginal growth of 0.09% (in 2025) and 0.6% (2026).
- It is followed by China, with projected oil demand of 16.90 million bpd (in 2025) and 17.12 million bpd (in 2026) and India, ranked at 2nd and 3rd position in terms of absolute oil consumption globally.
ii.As per the report, global oil demand will increase by 1.3 million bpd both in 2025 and 2026, unchanged from OPEC’s previous projections.
India-Specific:
i.The report highlighted that India’s economy continued to expand at the starting of 2025. It projected that India will continue to maintain robust economic growth for the remaining part of the year, supported by ongoing consumer spending, investment and government support for key sectors.
ii.As per the report, Diesel will continue to be the primary driver of oil demand growth in India, driven by extensive road infrastructure projects boosting bitumen consumption.
- Also, robust transport fuel demand, manufacturing growth and petrochemical feedstock requirements will further boost overall oil demand growth.
iii.In 2025, overall oil demand growth in India is projected to grow by 188,000 bpd on yearly basis i.e. to an average of 5.7 million bpd.
- In 2026, oil demand in India is expected to increase by 246,000 bpd to an average of 6.0 million bpd , driven by resilient economic activity and government backing key sectors.
iv.The report noted that recent USA tariffs have the potential to dampen India’s Gross Domestic Product (GDP), but, fiscal and monetary stimulus measures are expected to mitigate some of these effects.
v.As per the report, India currently depends on imports for over 85% of its crude requirements, with imports hitting a record of 5.4 million bpd in March 2025, marking an increase of over 5% month-on-month (m-o-m).
- Also, product imports increased by 2% m-o-m, driven by increased inflows of Liquefied Petroleum Gas (LPG).
- While, product exports declined by almost 3%m-o-m, mainly due to decreased gasoline and naphtha exports, partially offset by higher diesel and fuel oil outflows.
vi.The report mentioned about top 3 countries which are the highest source of India’s total crude imports (as per the Kpler data): Russia accounted 36% of India’s total crude imports in March 2025 compared to 31% (in February 2025); followed by Iraq (17%) and Saudi Arabia (11%).
About Organisation of the Petroleum Exporting Countries (OPEC):
It was founded in September 1960 in Baghdad (Iraq), with signing of an agreement by 5 countries namely, Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
Secretary General- Haitham Al Ghais
Headquarters- Vienna, Austria
Member Nations- 12 (India is not its member)
