India’s oil demand growth is set to outpace China’s this year, according to commodity trading firm Trafigura Group.
“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.”
Both China and India, Asia’s largest crude importers, remain critical to global oil demand trends as producers and traders adjust to shifting economic conditions and the expansion of renewable energy. India’s growth is being fueled by rapid urbanization and rising household incomes, while China’s underlying crude consumption has slowed, apart from demand in the petrochemical sector.
China’s overall oil consumption this year has nevertheless been supported by steady commercial and strategic stockpiling. This build-up — estimated at around 200,000 barrels per day in recent months — has helped underpin global crude prices even as OPEC+ restored idle capacity at a rapid pace, including further output increases announced 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. However, he noted that such stockpiling is unlikely to be sustained in the long term and may not be able to absorb the expected market surplus.
Looking ahead, Rahim cautioned that the outlook for global oil demand in 2025 remains uncertain. “Is there enough demand to absorb this?” he asked. “We’re talking about just under a million barrels a day of demand growth. Unless you’re looking at double that, purely on the demand side, it’s difficult to see how the additional supply will be absorbed.” (Source: Economic Times)
