New Delhi: India is set to drive global oil demand growth through the end of the decade, even as China’s consumption flattens and the United States slows its production expansion, according to the International Energy Agency’s (IEA) Oil 2025 report released on Tuesday. Emerging economies are expected to account for all net demand growth through 2030, with Organisation for Economic Co-operation and Development (OECD) countries seeing a combined decline of 1.7 mb/d over the same period, said the report. This is a major rebalancing of oil demand geography.
India will see the largest increase in oil demand among all countries between 2024 and 2030 — rising by nearly 1 million barrels per day (mb/d). The IEA attributes this to India’s expanding middle class, urbanisation, infrastructure upgrades, and greater industrialisation, all of which are making the economy more energy-intensive.
Although India will lead demand growth in absolute terms, its per capita oil consumption and GDP remain well below China’s. The report makes clear that while India is ascending, it won’t replicate China’s rapid demand boom of the 2010s.
The IEA forecasts that global oil demand will plateau at around 105.5 mb/d by 2030. Growth will slow significantly after 2026, with annual additions falling from 700,000 barrels per day in 2025 to near zero by decade’s end. This is due to weak economic growth, accelerating adoption of electric vehicles, and a structural shift away from oil in transport and power sectors.
From 2026 onward, most of the growth in oil demand will come from the petrochemical sector — not from transport. Products like plastics, polymers, and synthetic fibers will require 18.4 mb/d of oil by 2030, or roughly one in every six barrels used globally. This is especially important as demand for oil in transportation and power generation flatlines or declines.
China — long the engine of global oil demand — is projected to add just 30,000 barrels per day through 2030, a dramatic downgrade from earlier projections. The IEA attributes this to surging EV sales, expanded high-speed rail networks, and broader economic restructuring that reduce dependence on oil, especially gasoline.
Electric vehicle (EV) adoption is expected to cut oil demand by 5.4 mb/d by 2030, with China accounting for about half of that. This is a major structural shift in the transport sector and a key driver of the plateau in global demand.
Commenting on the structural transformation of oil markets, IEA Executive Director Fatih Birol said: “When we look at oil market trends over the past decade, we see a remarkable double act – thanks to the shale revolution, the United States has accounted for 90% of oil supply growth worldwide, while 60% of the rise in global demand has come from China. But these dynamics are shifting. Based on the fundamentals, oil markets look set to be well-supplied in the years ahead – but recent events sharply highlight the significant geopolitical risks to oil supply security. When it comes to energy security, there is no room for complacency. The IEA remains deeply committed to working with energy producers and consumers to safeguard energy security.”
Despite slowing demand, global oil supply is forecast to rise by 5.1 mb/d by 2030, led by Saudi Arabia and the United States. This increase could result in a supply surplus unless production is adjusted, potentially putting downward pressure on oil prices.
Global refining capacity is projected to grow more than demand. With 4.2 mb/d of new capacity coming online (especially in China and India) but only 710 kb/d of refined product demand growth, many refineries — especially in Europe and the US — may face closures due to unviability.
The report flags persistent risks from geopolitical instability, especially in the Middle East. Volatile oil prices and trade tensions have already led to a 6 percent decline in upstream investment in 2025, particularly in the US shale sector, which has traditionally been a major driver of global supply.
