The International Energy Agency (IEA) has adjusted its projection for the growth of oil demand in 2024 downward, citing expectations of reduced fuel consumption amid an economic slowdown in advanced OECD countries.
According to the Paris-based agency, it has decreased its forecast for oil demand growth in 2024 by 140,000 barrels per day (bpd) to 1.1 million bpd.
In its monthly oil report, the IEA attributed the lower growth outlook for 2024 to a slowdown in industrial activity and a mild winter, leading to decreased fuel consumption. The agency also highlighted a decline in the share of diesel cars, resulting in reduced fuel sales.
"Combined with weak diesel deliveries in the United States at the start of the year, this was enough to tip OECD oil demand in the first quarter back into contraction," the IEA stated.
Contrarily, the Organization of the Petroleum Exporting Countries (OPEC) anticipates a 2.25 million bpd increase in world oil demand for 2024, a projection that could support higher oil prices for the oil cartel.
The IEA's forecast for 2025 places oil demand at 1.2 million bpd, slightly higher than the projection for 2024.
Given that India imports over 85% of its crude oil requirement, fluctuations in global oil prices impact the country's oil import bill and currency exchange rate due to increased foreign exchange outflow.
India's decision to procure oil from Russia, despite Western pressure, has contributed to a 16% reduction in the country's oil import bill to $132.4 billion for fiscal year 2023-24, down from $157.5 billion in the previous year.
Although the total quantity of oil imported remained relatively stable at 232.5 million metric tonnes (MMT) in 2023-24 compared to 232.7 MMT in 2022-23, the cost-saving measures have helped mitigate the impact of global oil price fluctuations on India's economy.