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India’s appetite for oil is set to rise significantly in the coming years, with domestic consumption projected to expand at a compound annual growth rate (CAGR) of 4 per cent over the next ten years, according to S&P Global Commodity Insights.

So far in 2025, India’s daily oil consumption has reached 4.8 million barrels per day (MBPD), representing a 4.3 per cent increase compared to the previous calendar year, reported PTI. The nation’s crude oil requirement stands at 5.4 MBPD for this year.

Despite this upward trajectory in demand, global oil prices have experienced a decline in 2025, driven by weak demand conditions and an increase in supply from OPEC+ and other producers. “For India, oil demand continues to grow, helped by favourable demographics and economic growth. India is quickly assuming a prominent place in the global oil demand growth order, while the base is still small to have an oversized implication on the global markets,” said Pulkit Agarwal, Head of India Content (Cross Commodities) at S&P Global.

Evolving Energy Sources and Role in Global Market

Agarwal also noted the shift in India’s sourcing strategies. “India's choice of oil sources continues to evolve as India's pivot to Russia continues largely unhindered in the fourth year of their meaningful initiation,” he said. This ongoing change in supply partnerships reflects India’s dynamic approach to meeting its energy needs amid global uncertainties.

Turning attention to the chemicals sector, India’s demand for petrochemicals is poised to outstrip its GDP growth in the financial year 2025–26 (April to March). “India's petrochemical demand is likely to outpace GDP growth in 2025-26 (Apr-Mar), despite concerns over a drop in urban demand and inventory build-up seen in the domestic markets amid tariff concerns,” said Stuti Chawla, Associate Director for India and Middle East Chemicals Pricing.

She emphasised that global producers see India as a bright spot amid worldwide challenges like reduced consumer spending, tariff ambiguity, tight margins, and excess capacity. “In a world plagued with slowing consumer demand, uncertainty over tariffs, tighter margins and over-capacity, global petrochemical producers are betting on India as a key demand driver in 2025,” she added.

Clean Energy Transition: Opportunities and Challenges

The country’s energy strategy also includes ambitious clean energy targets. Gauri Jauhar, Executive Director, Energy Transition & Cleantech Consulting, emphasised the complexity of achieving net zero goals. “Achieving net zero carbon emission, energy transition targets across multiple technology options will require connecting the dots of policy, regulatory and corporate action with a push for greater consistency,” she said.

However, several hurdles remain in the transition process, especially around affordability. Agarwal explained that the cost factor is pivotal in determining the pace of change. “For any kind of transition the cost of green energy is, of course, a big major factor which determines how fast the transition happens,” he noted. Highlighting the complexity of shifting energy paradigms, he added, “But, when we talk about transition and when we talk about any kind of transition, the older form of energy is almost never phased out. Remember, the world transition from coal to oil doesn't mean that the world does not consume coal. The world today is consuming more coal than probably it ever did.”