India Poised To Take Lead In Oil Demand Growth In Next Decade: Moody's Ratings

New Delhi: Global rating agency Moody’s Ratings has said that China drove global oil demand growth over the last decade, but now India is poised to take the lead in demand growth over the next decade. China and India are placed second and third oil consumers in the world, but there are notable differences in demand growth in the two countries.

As per the rating agency's latest report, demand growth and import reliance will be higher in India and it will grow faster in India than in China over the next decade, as China's economic growth slows and penetration of new energy vehicles accelerates. Consumption of crude oil — the raw material for making fuels like petrol and diesel — in China will peak in the next 3-5 years, while in India Moody’s expects annual growth of 3-5 per cent in the same period.

Stating that both countries rely heavily on oil and gas imports, Moody’s said that it expects China’s reliance on oil imports to fall, reflecting slower demand growth and increased domestic production. “India's reliance on imports will increase if it is unable to stem a production decline,” it said in its report.

Moody’s also said that China’s larger oil and gas consumption underpins the scale of its national oil companies (NOCs), which will likely outpace their Indian peers in production growth over the next 3-5 years. “Investments in complex shale gas and offshore projects bolster Chinese NOCs’ reserves and production, while Indian NOCs face challenges from aging wells and slow investment,” it said.