India, Africa to be major contributors to 112 million barrel/day of peak global crude oil demand in 2030: S&P

The global demand for crude oil is expected to see its peak in 2030 at 112 million barrels a day mark with India and Africa to be major contributors, according to S&P Global Commodity Insights. The current global demand of crude oil is at 103 million barrels per day, Pulkit Agarwal, head of India Content at S&P Global Commodity Insights, said on Thursday.

The global demand for crude oil will peak to stay in the range of 112 million barrels a day in 2030 from the present level of 103 million barrels a day, he told PTI at S&P Global Commodity Insights: Media Roundtable Outlook 2024.

India and Africa will be the major contributors to the 8.73 per cent increase in demand by 2030 as industrial activities will pick up in the region, Agarwal said.

There will be increased use of clean cooking, automotives and setting up of refinernies by various economies, he said.

However, the demand for crude oil in India will see its peak in 2040 to reach 7.2 million barrels a day from 5.2 million barrels a day at present, he said.

On the price outlook he said, "In our base case, oil prices will likely hover above USD 80/barrel and can inch closer to USD 90/barrel by Q3 2024."

Gauri Jauhar, Executive Director, Energy Transitions & CleanTech Consulting, S&P Global Commodity Insights, said as India grows, it will also transition at a sustainable pace based on an underlying economic transition of mobility, urbanization and a desire for reliability.

An energy transition will inevitably be a technology transition to reduce emissions, and the cleaner technology spectrum offers a range of near-term, medium-term and long-term solutions. These cleaner technologies will need financing and policy support, globally and in India, to reach giga scale, she said.

Stuti Chawla, Associate Director, India/Middle East Chemicals Pricing, S&P Global Commodity Insights, said India is expected to remain a bright spot in Asia for petrochemical demand in 2024, given its strong economic growth and resilient industrial production. Greater demand, however, is unlikely to bring much relief to domestic producers struggling with pressure on margins, as prices of key bulk chemicals are expected to remain suppressed due to ample supplies and new capacities coming on stream.

The market for chemical commodity products in India is expected to grow at around 7 per cent in 2023 and 8 per cent in 2024. The robust demand growth is being driven by a sharp pickup in India's economic activity after it emerged from COVID-19 lockdowns.

Elvis John of S&P Global Commodity Insights said India imposed a slew of restrictions on grains trade in 2023 amid rising domestic prices, fear of El Nino affecting crop production, and ahead of state elections and general elections in 2024.

Domestic prices of non-Basmati rice moderated slightly with export curbs in place and arrival of new crop. However, market participants do not see a sharp fall in prices in the short term as they expect the government to be active in procurement ahead of numerous state elections and general election in 2024, he said.