Daily Update: India Energy Week Reflects Shifting Center of Oil Markets
Today is Tuesday, February 18, 2025, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global.?Subscribe?to be notified of each new?Daily?Update.?
India Energy Week (IEW) took place in New Delhi from Feb. 11–14, bringing together thousands of delegates representing producers, traders, regulators and energy companies from all over the world. The increasing prominence of IEW over the past few years reflects a gradual shift in oil markets as stakeholders redirect their attention to the South Asian nation. For years, China has been the locus of growth for the oil industry. While China will continue to lead other countries in growth by volume this year, India’s projected oil demand growth of 3.2% will outpace China's projected growth of 1.7%. As India anticipates an era marked by a rising middle class, higher transportation requirements and industrial expansion, the oil sector has come to view the country as its strongest source of demand growth.
To meet this demand, India is diversifying its suppliers and building out increased domestic refining capacity. Despite pressure from Western nations to participate in international sanctions following Russia’s invasion of Ukraine, India imported about 35% of its total crude requirements from Russia in 2024. Russia says it will continue supplying hydrocarbons to what it calls "pragmatic and reasonable" countries such as India. However, India has been working to diversify its oil supply beyond Russia to include non-OPEC suppliers such as the US, Canada and Guyana.
"With production rising and non-OPEC producers looking for high output, India stands to gain from higher supplies and lower world prices," India’s oil minister, Hardeep Singh Puri, said from the stage at IEW. "We are looking to strengthen our relations with new suppliers like Guyana."
Increasing domestic refining capacity is another key issue for India as it seeks to grow, maintain a measure of control over its energy security and gain access to new export markets for refined products. S&P Global Commodity Insights estimates that India's refining capacity will rise to about 300 million metric tons by 2028 from 256 million metric tons currently. Key projects include expanding the Panipat, Paradip, Gujarat and Barauni refineries to increase their capacities and integrate petrochemical production units.
"We foresee a steady growth in refining capacity in India in the coming two decades. India's per-capita energy consumption is still one-third of the global average. Therefore, fossil fuel will remain part of the country's energy mix, the proportion of which may change in due course, to fulfill its objective to provide accessible, affordable and equitable energy to its growing population," said Vartika Shukla, chairman and managing director of state-run company Engineers India.
India is also looking to increase its strategic oil storage capacity to build up a buffer against price rises and boost energy security. In addition to building out storage capacity domestically, India has been eyeing Oman and other Middle Eastern countries as potential strategic oil storage options.
Today is Tuesday, February 18, 2025, and here is today’s essential intelligence.
Written by Nathan Hunt.
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Director administration, management and operations
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