IEA’s report Indian oil market outlook to 2030 report

IEA’s report Indian oil market outlook to 2030 report

This article covers ‘Daily Current Affairs’ and the topic details of ”IEA’s report Indian oil market outlook to 2030 report”.This topic is relevant in the “Indian Economy” section of the UPSC CSE exam.


Why in the News? 

The International Energy Agency (IEA) recently published the Indian Oil Market Outlook to 2030 report, which examines how India’s involvement in the global oil market may change between now and 2030. The report examines energy transition patterns that may affect oil demand in various industries , and how these changes may impact the country’s energy security.


What does the report say? 


India’s Preeminence in Oil Demand Growth:

Projections indicate that India will emerge as the primary contributor to global oil demand growth until 2030, surpassing China by 2027. The anticipated surge in India’s oil demand is estimated to reach approximately 1.2 million barrels per day (bpd) by 2023, constituting over a third of the projected global demand growth of 3.2 million bpd by 2030. The outlook for India’s total oil demand projects an increase from 5.48 million bpd in 2023 to 6.64 million bpd in 2030. This growth is attributed to robust economic expansion, population growth, and demographic factors.


Investments in the Refining Sector:

Indian oil companies are making substantial investments in the refining sector to meet the escalating domestic oil demand. Over the next seven years, India is expected to add 1 million bpd of new refinery distillation capacity, surpassing any other country globally outside of China. Additional significant projects are under consideration, potentially exceeding the anticipated 6.8 million bpd capacity.


Role in Global Oil Markets:

India is positioned to maintain its role as a crucial exporter of transportation fuels to markets in Asia and the Atlantic Basin. Since 2022, India’s influence as a global swing supplier has grown, particularly with the redirection of Asian diesel and jet fuel due to the loss of Russian product exports to European markets. In 2023, India ranked as the fourth-largest exporter of middle distillates globally and the sixth-largest exporter of refinery products at 1.2 million bpd. The forecast indicates that new refining capacity will initially boost global product supplies to 1.4 million bpd through the mid-decade before slightly declining to 1.2 million bpd by 2030 due to the rise in domestic demand.


Increased Fuel Demands:

Diesel/gasoil is identified as the predominant driver of oil demand growth in India, contributing nearly half of the nation’s increase and over one-sixth of the total global oil demand growth by 2030. Jet-kerosene demand is poised to experience substantial growth at an average rate of 5.9% per year, albeit from a lower baseline compared to other countries. India’s average fuel consumption is expected to increase by 0.7%, as the country’s growing fleet of electrified vehicles helps to offset a larger increase in demand.. The electrification trend is also expected to lead to modest growth in gasoline demand, while increased investments in production facilities are anticipated to drive LPG demand.


Crude Oil Imports:

India’s crude oil imports are predicted to rise by more than a fourth to 5.8 million barrels per day by 2030 , due to sustained demand growth and falling domestic supply. Currently, India relies on imports to fulfill over 85% of its oil requirements, making it the third-largest global consumer of crude oil after the US and China. The nation’s domestic consumption, as per oil ministry data, stands at around 5 million bpd.


Biofuels in Decarbonization:

Biofuels are expected to play a pivotal role in India’s transport sector decarbonization. India currently stands as the world’s third-largest producer and consumer of ethanol, with domestic production tripling over the last five years. Supported by ample feedstocks, political backing, and effective policy implementation, India’s ethanol blending rate of approximately 12% ranks among the world’s highest. India has expedited its timeline for doubling nationwide ethanol blending in gasoline to 20%, aiming to achieve this by Q4 2026. However, meeting the 20% ethanol blending target within this accelerated time frame poses several challenges, primarily related to rapidly expanding feedstock supplies.



Efforts in Energy Transition:

The increased adoption of Electric Vehicles (EVs) is anticipated to play a pivotal role in the transport sector’s decarbonization. Projections estimate that the combined impact of new EVs and energy efficiency improvements will prevent an additional 480,000 barrels per day of oil demand in the 2023-2030 period. Without these gains, India’s oil demand would reach a significantly higher 1.68 million bpd by 2030 compared to the current forecast.



Despite making efforts to attract foreign upstream investment, the domestic crude oil production is expected to continue declining over the medium term due to a lack of new discoveries. In 2023, India ranked as the world’s second-largest crude oil net importer, having increased imports by 36% over the past decade to 4.6 million bpd to meet rising refinery intake. The continued expansion of refining processing is expected to further elevate crude oil imports to 5.8 million bpd by 2030, posing significant implications for India’s security of supply.



India’s current oil stock holding levels equate to 66 days of net-import cover, with Strategic Petroleum Reserve (SPR) stocks covering seven days. In comparison, IEA member countries maintain a stockpile equivalent to 90 days of their demand. While India holds an associate member status and is not a full member of the agency, there is a need to enhance its capacity to respond to potential oil supply disruptions. Strengthening and implementing SPR programs and enhancing oil industry readiness are crucial steps to mitigate the impact of emergencies such as wars on energy supplies.

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Prelims practice questions 


Q1. Consider the following statements: (UPSC Prelims-2019)

  1. The coal sector was nationalised by the Government of India under Indira Gandhi.
  2. Now, coal blocks are allocated on a lottery basis,
  3. Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production.

Which of the statements given above is/are correct?

A. 1 only

B. 2 and 3 only

C. 3 only

D. 1, 2 and 3




Q2. Which of the following is/are the characteristic/characteristics of Indian coal? (UPSC Prelims-2013)

  1. High ash content
  2. Low sulphur content
  3. Low ash fusion temperature

Select the correct answer using the codes given below:

A. 1 and 2 only

B. 2 only

C. 1 and 3 only

D. 1, 2 and 3




Mains practice questions 


Q1. How is India planning to address the security implications of relying on imports for over 85% of its oil requirements, and what measures are in place to diversify and secure its sources of crude oil?

Q2. How does India plan to balance its growing oil demand with the need for energy security, considering the projected increase in crude oil imports and declining domestic production?

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