New Delhi [India], March 17 (ANI): Despite increasing consumption in developing economies, global oil supply is anticipated to outpace demand growth and India is expected to be the major driver of consumption growth according to a report by Phillip Capital.

'With GDP growth projections above 6 per cent annually, India's energy demand will continue to soar, and the country will remain heavily reliant on fossil fuels, including oil, to meet its needs,' said the report.

As per the International Energy Agency (IEA) India's oil demand is projected to rise by 1.3 million barrels per day (mbpd) by 2030. The Organization of the Petroleum Exporting Countries (OPEC) estimates an even higher increase of 1.8 mbpd, bringing India's total oil consumption to 7.1 mbpd, up from 5.3 mbpd in 2023.

India's economic growth, expanding middle class, and young population are fuelling this demand. Investments in oilfield services and cost reductions have ensured that production remains strong, even in the face of lower oil prices.

By 2030, the IEA and OPEC forecast that global oil supply capacity will grow by approximately 6 mbpd, reaching 113.8 mbpd. Non-OPEC countries will be responsible for 76 per cent of this increase, with the United States contributing between 2.1 and 2.3 mbpd. Other key contributors include Brazil, Guyana, Canada, and Argentina.

The rise of electric vehicles (EVs) is often cited as a key factor in reducing oil demand. In 2023, 14 million EVs were sold, accounting for 18 per cent of global car sales, a significant increase from 2 per cent in 2018.

However, EVs currently make up only 2.5 per cent of the total global vehicle fleet, with sales primarily concentrated in China, the European Union, and the United States.

While the IEA projects that EV sales will grow by 23 per cent annually through 2035, potentially displacing 6 mbpd in oil demand by 2030, recent trends suggest otherwise.

The growing popularity of plug-in hybrid electric vehicles (PHEVs) over battery electric vehicles (BEVs) and the challenges in electrifying heavy transport could limit the expected decline in oil consumption.

Despite the ongoing transition to renewable energy, the global reliance on crude oil and natural gas will persist. Oil demand growth will be primarily driven by developing nations in a well-supplied market. This balance is expected to result in stable crude prices, ranging between USD 65 and USD 75 per barrel, barring major geopolitical disruptions.

This price range is considered optimal for both upstream and downstream players in India, ensuring steady energy supply while maintaining economic stability in the oil sector. (ANI)