Elephant in the oil room: India set to take lead ahead of China as fuel frenzy picks up steam
After more than a decade of dominance by China, the global
oil
and gas spotlight is shifting, and it's
India
that's now centre stage.
According to a latest Moody's report, India is poised to overtake China as the biggest driver of global oil and gas demand growth over the next decade. The shift marks a dramatic rebalancing, powered by India's accelerating industrialisation, massive infrastructure push, and a growing middle class with increasing mobility needs.
But, on the other side of the story is a slowing Chinese economy and a rapid rise in electric vehicle adoption, both of which are cooling the country's once-insatiable thirst for fuel.
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by Taboola
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India's economic engine shows no signs of slowing. Real GDP growth is projected at 6.3% in 2025 and 6.5% in 2026, putting the country firmly at the top of the G-20 growth charts, highlighted Moody's report. This robust expansion, combined with rising demand for transportation fuel and stepped-up investments by state-run oil marketing companies in refining capacity, is expected to keep oil demand climbing sharply.
It's not just oil. Gas, too, is becoming a bigger piece of India's energy puzzle. The government plans to increase natural gas's share in the energy mix from around 6% today to 15% by 2030. Demand is being driven by fast-growing sectors like fertilisers, petrochemicals, and city gas networks. Annual growth is projected between 4% and 7% through the end of the decade. Yet challenges such as affordability and patchy infrastructure remain barriers to faster adoption.
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Meanwhile, China is actively reducing its reliance on imported oil, driven by a pivot toward energy self-sufficiency and cleaner alternatives. While the gas demand in China will continue to rise, buoyed by carbon transition policies, the pace is expected to slow, as economic growth tapers and the base gets larger.
India's rocketing oil demand
India's oil demand is projected to grow faster than any major economy, with a rate of increase nearly double that of China in 2025 and 2026. According to OPEC's latest global outlook, India's oil demand will rise from 5.55 million barrels per day (bpd) in 2024 to 5.74 million bpd in 2025, marking a 3.39% increase. By 2026, this figure is expected to reach 5.99 million bpd, growing at 4.28%.
In contrast, China's oil demand is set to expand by just 1.5% in 2025 and 1.25% in 2026. However, the US will continue to be the largest oil consumer, with demand projected at 20.5 million bpd in 2025.
Despite slower growth in the US and China, global oil demand is expected to rise by 1.3 million bpd in both 2025 and 2026, driven by India's increasing fuel needs.
Not just oil, India's energy landscape is expanding too!
India's oil demand growth is being fueled by robust infrastructure development and growing transport fuel needs, particularly as the country expands its road network. As a result, diesel remains the primary driver of demand, and the country's refineries are stepping up production to meet the growing needs.
India's crude oil imports also hit record levels, with a significant portion coming from Russia.
India is expected to import close to 1.8 million barrels per day of Russian crude in May 2025, marking the highest level in 10 months, flagged a Reuters report.
This growing demand for lighter Russian grades, combined with refinery maintenance and upgrades, is expected to keep imports high through mid-2025.
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