Oil Makes a Comeback in 2025: Why India Is Now the Engine of Global Energy Demand Published By Anupam Nath In 2025, the global energy landscape witnessed a striking shift as oil and gas made a strong comeback, defying years of forecasts that predicted an imminent peak in fossil fuel demand. Major outlooks from BP, McKinsey and the International Energy Agency (IEA) have now pushed expectations of peak oil demand into the 2030s, signalling that hydrocarbons will remain central to the global energy mix for longer than anticipated. At the heart of this resurgence stands India, emerging as the fastest-growing driver of oil consumption and a critical pillar of global demand growth. Across multiple projections, India is consistently identified as the epicentre of future oil demand, with its increase in consumption expected to outpace that of China and Southeast Asia combined. Strong economic growth, rapid urbanisation, rising vehicle ownership and expanding industrial activity are all fuelling higher demand for petroleum products ranging from petrol and diesel to jet fuel and petrochemical feedstocks. This trend is reinforced by India’s refining expansion, which is strengthening the country’s position as a global refining hub capable of supplying both domestic and export markets. On the supply side, India’s crude oil import strategy has adjusted to a more volatile geopolitical environment. Russia has remained a major supplier, providing roughly one-third of India’s crude imports in 2025, even as sanctions on companies like Rosneft and Lukoil forced refiners to diversify toward non-sanctioned Russian entities and alternative sources in the Middle East and the United States. This diversified approach allows India to secure discounted barrels while also reducing overdependence on any single partner. At the same time, collaboration between ONGC and BP at ageing fields such as Mumbai High underscores the push to stabilise domestic production and curb import dependence. Global oil prices have been relatively stable through 2025, with Brent crude largely trading in a band from the upper 50s to the mid-70s per barrel, providing some relief to major importers like India. Analysts broadly expect prices to average below 70 dollars per barrel for the year, a level that eases fiscal pressure while still incentivising upstream investment. Yet the broader picture remains complex: wars, sanctions and shifting alliances continue to shape trade flows, even as climate commitments and clean energy investments advance in parallel. The result is an energy system in transition, not replacement, where oil remains “king” for now—especially in fast-growing economies like India that are balancing development priorities with long-term decarbonisation goals.
