India to Drive Global Oil Demand as 500 GW Green Push Grows

• India to drive global oil demand growth.
• Renewable energy target raised to 500 GW by 2030.
• Trade shifts amid reduced reliance on Strait of Hormuz.

India is set to be the foremost demand driver of global oil demand growth while accelerating the transition to 500 GW of renewable capacity, as Arnold Klann Editor, S&P Global Commodity Insights stated.

At a roundtable in Mumbai on energy security, industry experts described how the geopolitical tensions, trade route disruptions and energy transition are impacting new energy systems, with India becoming an important player.

Premasish Das, Executive Director, Oil Markets Research, indicated that while global oil demand was expected to grow by 1.2 million barrels per day (b/d), global demand growth could slow to 0.8 million b/d in 2025 due to trade disruption and uncertainty in the economy as a whole.

He added, "The Trump administration’s sweeping tariffs on all trading partners have introduced significant economic uncertainty, potentially reducing global GDP growth from 2.8 per cent in 2024 to 2.2 per cent in 2025".

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The largest demand declines were expected in China and the U.S., which would see demand declines especially in diesel and jet fuels, but India - perhaps as the only critical growth in demand in the world - would increase its demand for oil as it becomes more reliant on imports of crude oil. Das expressed that there would be increased supply from OPEC+, which might lead to slower price increases, and in fact price decreases, with Brent crude estimated to average $68/b in 2025 and drop below $60 by year end.

India achieved a significant milestone in reducing reliance on the Strait of Hormuz for oil imports. Rahul Kapoor, Vice President of Shipping Research commented on India's reduction of imports from 55% for the 2019-2022 period down to 41% of oil imports in 2024 largely credited to its increased Russian crude purchases. He remarked about resilience and shipping including sanctions and all sorts of geopolitical risks.

On renewables, Eduard Sala de Vedruna noted that India surpassed 200 GW of installed capacity, with the government aiming to reach 500 GW by 2030. There are still a number of challenges, including grid constraints and financial distress in discoms, but policy support, the ability of private investors, and new technologies are all contributing factors to the growth of renewable energy capacity.

Vedruna added, "The country is heavily reliant on coal, which accounts for a substantial portion of its energy production. However, there is a strong push towards diversifying the energy mix".

Also, Jenny Yang noted that in all probability renewables, including batteries, will make up the majority of new capacity worldwide through to 2050. Even the non-fossil share of India's capacity is forecasted to reach 77% by then. S&P mentioned that India's transition to a low-carbon energy system will not depend solely on technology but also regulatory reform as well as partnerships and collaboration nationally and internationally.