Oil demand growth in India is expected to surpass that of China this year, according to a report by Trafigura Group, signaling a significant shift in global crude consumption trends.
“We would be constructive on Indian demand,” said Saad Rahim, Chief Economist at Trafigura, during the APPEC conference hosted by S&P Global Commodity Insights on Monday. “This year, Indian demand is set to outstrip China’s, if you exclude strategic stockpiling.”
India and China, the region’s leading crude importers, remain key drivers of global oil demand, even as both nations navigate the impacts of economic shifts and the growing influence of renewable energy. In India, rising urbanization and increasing incomes are fueling demand growth, while China is experiencing slowing crude consumption outside the petrochemical sector.
China’s overall consumption growth, however, has been bolstered by substantial stockpiling, both commercial and strategic. This accumulation, totaling roughly 200,000 barrels per day in recent months, has helped sustain global crude prices, even as OPEC+ rapidly restored idled production capacity and implemented further loosening measures over the weekend.
“Today, China is willing to stockpile and increase their SPRs,” said Frederic Lasserre, global head of research and analysis at Gunvor Group, referring to strategic petroleum reserves. Still, he cautioned that China may face limits in sustaining stockpiling over the long term and may struggle to absorb the anticipated surplus in the market.
Looking ahead to next year, Trafigura’s Rahim highlighted uncertainty in global demand growth. “Is there enough demand to absorb this?” he asked. “We’re talking about — next year — just under a million barrels a day of demand growth. Unless you’re talking about double that, just on the demand side, it’s really very hard to see.”
As India’s consumption rises and China’s growth slows, the global oil market faces a critical test in balancing supply with emerging patterns of demand, especially amid ongoing OPEC+ production adjustments and shifting energy dynamics.