India’s consumption of liquid fuels is anticipated to reach 6.6 million barrels per day (mb/d) by 2028, driven by growing domestic demand and expanding refinery capacity. According to the US Energy Information Administration (EIA), this increase could compel Indian refiners to seek alternative crude oil sources, such as those from the Americas, due to reduced exports from West Asia resulting from OPEC+ production cuts.
The EIA highlighted that, similar to China, India’s need for diversified crude oil supplies will intensify as Middle Eastern exports decrease. In 2023, Indian imports from West Asia fell to 2 mb/d from 2.6 mb/d in 2022, with Russia emerging as a significant source.
The International Energy Agency (IEA) forecasted that non-OPEC+ crude supply will rise, partially compensating for the loss of West Asian medium sour crudes. Countries like Brazil, Guyana, and Canada are expected to increase their exports, with light sweet US crude likely to flow into European, African, and Asian markets, including India.
The IEA’s August 2024 report predicts non-OPEC+ production will grow by 1.5 mb/d in 2024 and 2025, challenging OPEC+ production cuts. Despite OPEC+ cuts, global inventories could increase due to higher non-OPEC+ supplies.
India has expanded its refinery capacity by 1.3 mb/d from 2011 to 2023, with future projects, including the Ratnagiri mega project, potentially adding up to 2.4 mb/d by 2028. The country’s liquid fuel consumption is projected to grow by 26% over five years, reaching 6.6 mb/d by 2028. This expansion is aligned with India’s strategic focus on boosting refining capacity to meet rising domestic demands and enhance its refining capabilities amidst evolving global oil dynamics.
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