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The US Power Data Administration put out an attention-grabbing article right now. The headline targeted on development of oil consumption in India in comparison with China — “India to surpass China as the top source of global oil consumption growth in 2024 and 2025.” I sat wanting on the chart for a number of minutes fascinated about what’s occurring in several main markets. Right here’s the chart:
As you may see, that is about developmentnot whole oil consumption. China’s oil consumption boomed in 2023, largely as a result of a lot larger use of oil for manufacturing petrochemicals, however then it’s forecasted right here to develop minimally in 2024. Others have stated oil consumption will actually decline in the country this year and the CNPC Economics & Know-how Analysis Institute thinks oil consumption peaked in the country last year.
The Center East is rising demand for its personal main product, and the US is predicted to have a small yr of development this yr after an enormous financial rebound final yr. However the standout nation for development of oil consumption is India. As I wrote two days agoIndia simply hasn’t lived as much as its personal hype and targets with automobile electrification, and that’s displaying increasingly because the nation continues to develop.
“Over 2024 and 2025, India accounts for 25% of total oil consumption growth globally. We expect an increase of 0.9 million barrels per day (b/d) in global consumption of liquid fuels in 2024. We expect even more growth next year, with global oil consumption increasing by 1.3 million b/d,” the EIA writes. “Driven by rising demand for transportation fuels and fuels for home cooking, consumption of liquid fuels in India is forecast to increase by 220,000 b/d in 2024 and by 330,000 b/d in 2025. That growth is the most of any country in our forecast in each of the years.”
Sadly, with India to this point behind in automobile electrification and in addition utilizing liquid fuels a lot for cooking, and even rising that use considerably, it’s onerous to see the nation turning these developments round anytime quickly. Large change is required in India.
China is the extra uplifting, and possibly extra attention-grabbing story. As already famous, after a growth in 2023, development has collapsed, however I’m not so certain the forecast for 2025 is a stable one from the EIA. Referencing electrical autos, financial system development slowing, and inhabitants decline, development of oil use within the nation just isn’t anticipated to be excessive based on the company, however the chart signifies a reasonably large chunk of development in comparison with this yr and in comparison with the US. I’m pondering it’s extra seemingly automobile electrification continues to hit oil use more durable than most forecasters count on (new EVs are going to be pushed greater than outdated gasoline vehicles, and EV gross sales might develop sooner in 2025 than they’re anticipated), and extra financial troubles could possibly be on the horizon if China and the USA underneath Trump get into a much bigger and larger tariff battle. Possible? Who is aware of, however it’s a particular risk. It’s actually seemingly should you consider what Trump has repeatedly stated about tariffs.
In fact, regardless of standout progress reducing oil consumption development, and maybe even reducing oil consumption total now, China nonetheless burns lots of oil. The EIA factors out that India remains to be far, far behind China in that regard regardless of now seeing sooner development in oil use. “Although India’s growth in percentage and volume terms exceeds China’s growth in our forecast, China still consumes significantly more oil. Total consumption of liquid fuels in India was 5.3 million b/d in 2023, while China consumed more than triple that amount at 16.4 million b/d in 2023, based on estimates in our December STEO.”
As for the US market, properly, that’s going to depend upon whether or not our financial system continues to rebound/develop or whether or not there’s some sort of “shocker” and the US financial system hits a troublesome interval (as is commonly the case underneath Republican administrations sooner or later).
We’ll see what occurs, however one thing tells me that we’re going to see a a lot totally different chart in 2025 than this forecast exhibits.
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