India will become largest source of global oil demand growth: IEA


India will become the largest source of global oil demand growth between now and 2030: IEA.


GS-03 (Economy)

Key Highlights:

  • ‘Indian Oil Market Outlook to 2030’ report was released at the second edition of India Energy Week 2024.
  • It reveals India will become the largest global oil demand growth source between now and 2030.
  • It also says that India’s role in global oil markets is expected to expand substantially over the remainder of the decade, fueled by strong economic growth, population and demographics.
  • The report found that massive industrial expansion means that diesel/gasoil is the single largest source of oil demand growth, accounting for almost half of the rise in the nation’s demand and more than one-sixth of total global oil demand growth through to 2030.
  • Further it stated that, new EVs and energy efficiency improvements will avoid 480 kb/d of extra oil demand in the 2023-2030 period.
  • Biofuels are also expected to play a key role in India’s decarbonization of the transport sector.
  • India’s ethanol blending rate of around 12% is amongst the world’s highest, and the country has advanced by five years its deadline for doubling nationwide ethanol blending in gasoline to 20% in Q4 2026.

International Energy Agency (IEA):

  • The International Energy Agency (IEA) is headquartered in Paris, France.
  • It was established in 1974 as an autonomous agency by member countries of the Organisation for Economic Cooperation and Development (OECD) in response to the oil crisis of the mid-1970s.
  • The primary focus of the IEA is on energy policies, encompassing economic development, energy security, and environmental protection.
  • Functions: It plays a crucial role in monitoring the International oil market and responding to any disruptions in oil supply.
  • Membership: The IEA consists of 31 member countries, along with 13 association countries, including India, and 4 accession countries.
    • To qualify as a candidate country for the IEA, a nation must already be a member of the OECD.
    • Some of the major reports published by the IEA include the World Energy Outlook, the World Energy Investment Report, and the India Energy Outlook Report.

Facts for Prelims:

  • IEA Oil Market Report (OMR) is one of the world’s most authoritative and timely sources of data on the global oil market. It provides forecasts and analysis on the global oil market, covering aspects like supply, demand, inventories, prices, and refining activity for IEA and select non-IEA countries.
    • Global oil demand growth slowed significantly to 1.7 mb/d year-on-year, down from 3.2 mb/d in the previous quarters, reflecting the decline in China’s post-pandemic travel demand surge.
    • World oil supply is projected to increase by 1.5 mb/d to reach 103.5 mb/d, driven by record output from the US, Brazil, Guyana, and Canada, with non-OPEC+ production leading the growth.
  • Ethanol blending: It is the process of mixing ethanol, a renewable and environmentally friendly fuel, with gasoline. The Ethanol Blending Program (EBP) is a government initiative that aims to increase the use of ethanol in petrol.