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West Asia will continue to be a big source of crude oil imports for India with the US being another potential source as the country’s oil demand is set to increase to five million barrels per day by 2021, the International Energy Agency (IEA) has said.
“India is most definitely a growth hotspot country in the period (through to 2021). We are looking at an extra million barrels to be added by 2021 on the back of strong economic growth,” Neil Atkinson, Head, Oil Industry and Markets Division at IEA, said here yesterday.
India used almost four million barrels per day of oil in 2015, backed by strong fuel demand from the transportation sector, especially the ever increasing number of vehicles and trucks.
“The transport sector with an increasing number of vehicles and trucks will lead the increase in consumption of gasoline and diesel,” said Atkinson in a keynote address at a forum promoting Singapore International Energy Week to be held during October 24-28 this year.
He pointed to the many projections on Indian economic growth of eight per cent per annum in 2021, up from the average of seven per cent over the past five years or so.
“Obviously, with India’s oil product demand growing strongly and given the fact that the country has a big refining industry, there is going to be a big increase in crude imports,” he said, highlighting the competition by crude oil exporters to gain a share of the Indian market.
He added that West Asia will continue to be the main source of crude imports for India.
Atkinson also saw the US being another potential source of crude oil supplies to India over the long-term, albeit the volume may not be significant.
The US could be another source of crude oil supply, which could benefit India in the years ahead, he said.
“We could also see in that time, not immediately, may be exports from, for example, the US,” he said.
He also saw the possibility of India stockpiling oil, like being done by China for security against any disruption given the instabilities in major hydrocarbons producing regions.
“India is a stable but not a very big producer of its own oil, it makes sense to have stockpile for disruption just the way the OECD countries had for the last 40 years,” he said without putting a number on the stockpiling volume.
An oil industry source estimated India’s crude oil stockpiling requirement at 100 million barrels, compared to China’s ongoing stockpiling of 300 million barrels, with a target of 500 million barrels.
The source said India’s current oil demand is about a third of China’s and it should hold at least 100 million barrels as security against any disruption to supplies though it is the fastest energy growing market and closest to West Asian suppliers.
The US has the world’s largest stockpile of crude oil at 700 million barrels.
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