India’s Influence in Global Oil Products Market Up Since 2022: IEA
India has seen a significant increase in its role as a global supplier of refined petroleum products since 2022, according to the International Energy Agency (IEA). The loss of Russian exports to European markets has led to a higher demand for Asian diesel and jet fuel, thus bolstering India’s position in the global oil market.
The IEA also emphasized that India’s oil demand growth is set to surpass that of China by 2027. However, the country’s rising oil consumption and heavy reliance on imports necessitate a focus on energy security for New Delhi, particularly in the wake of the global energy crisis triggered by Moscow’s invasion of Ukraine.
The latest report on India’s oil market released at the India Energy Week highlighted the substantial expansion of India’s role in global oil markets in the coming years. This expansion is expected to be driven by the country’s robust economic growth, population increase, and demographic factors.
The report revealed that India became the fourth-largest exporter of middle distillates worldwide and the sixth-largest exporter of refinery products in 2023, with a daily export volume of 1.2 million barrels. On the demand side, India is on track to witness a significant oil increase of nearly 1.2 million barrels per day by 2030, accounting for over a third of the global gains projected at 3.2 million barrels per day.
Currently, India has an annual refining capacity of 250 million tonnes, which is expected to reach 240 million tonnes by 2030. The country’s emergence as an exporter of petroleum products can be attributed to the establishment of large refineries in Gujarat by Reliance Industries Ltd and Nayara (formerly known as Essar) between 1999 and 2008.
Reliance Industries dominates exports to the Atlantic basin and Southeast Asia, while Nayara focuses on Africa. Despite a slight decline in exports, India exported 45.2 million tonnes of petroproducts in the April-December period of the 2023-24 fiscal year.
India’s petroproducts exports, fueled by the availability of cheap Russian crude following the Ukraine conflict, played a crucial role in preventing a global product shortage by filling the gap left after Europe and the US stopped purchasing Russian supplies.
Looking ahead, India is expected to maintain its position as a key exporter of transport fuels due to continued investment in refining capacity and complexity, which will enhance light and middle distillate production. The IEA projects that new capacity will drive global product exports to 1.4 million barrels per day by the mid-2020s, gradually decreasing to 1.2 million barrels per day by 2030 in response to the steady rise in domestic demand.
India’s growing influence in the global oil products market has far-reaching implications. As the country continues to expand its economy, population, and refining capacity, it is poised to play a pivotal role in meeting global energy demands. With energy security as a top political priority, India has positioned itself strategically in the global energy landscape.
