India’s Q2 Oil Demand Demonstrates Robust Potential Amid Concerns Over Tariffs Affecting Product Exporters

India is anticipated to witness significant growth in oil product demand during the second quarter, attributed to seasonal influences such as the wedding season, summer travel, and agricultural activities. It is expected that oil demand will increase by over 100,000 barrels per day (b/d) compared to the same period in the previous year. Specifically, diesel consumption is projected to rise by 70,000 b/d, while gasoline demand is expected to exceed 55,000 b/d.

In March, oil product demand demonstrated a notable increase of 9.3%, reaching 20.91 million metric tons (5.3 million b/d). However, this figure represents a decline of 3.1% on a year-on-year basis. Month-over-month, diesel and gasoline demand experienced growth of 10% and 10.6%, respectively.

Despite these positive trends, global trade uncertainties may pose challenges to oil products, particularly diesel, due to potential tariffs and the implementation of new trade policies anticipated in the latter half of the year.

As the world’s third-largest crude oil importer, India meets over 85% of its domestic crude oil needs through international sources. For 2024, India’s oil product demand is projected to grow by 3.9% year on year, reaching a total of 240 million metric tons, or 5.1 million b/d, according to data from the Petroleum Planning and Analysis Cell.

Commodity Insights forecasts that the average Platts Dated Brent price will be $68 per barrel for the year under a preliminary base-case scenario, which represents a significant decrease from the average Platts Dated Brent price of $81 per barrel in 2024. This pricing trend is expected to extend into 2026.

Source: S&P Global