Amid volatile global oil prices and mounting economic uncertainty, S&P Global Commodity Insights warns that trade tensions and unpredictable tariff regimes are further clouding the outlook for the energy sector. A slowdown in global oil demand, coupled with rising output from both OPEC+ and non-OPEC producers, has significantly weakened the fundamentals of the oil market in 2025.
Yet, in this storm of supply-demand imbalance, India is standing out as a rare driver of energy optimism.
“While Chinese demand has slowed, the market is now turning to India to lead future oil consumption growth,” said Pulkit Agarwal, Head of India Content at S&P Global Commodity Insights.
India’s oil demand remains buoyant, supported by robust economic growth and favourable demographics. Despite global headwinds, India continues to diversify its crude basket, with its strategic pivot to Russian oil entering a fourth consecutive year.
India’s tricky energy balancing act
- S&P Global outlines three potential scenarios for India’s energy mix by 2050:
- In the base case, fossil fuels remain dominant, with only a gradual decline.
- In an accelerated greening scenario, their share could drop to 33%.
Also Read: OPEC sees India’s oil demand rising 3.4% in 2025, double the pace of China
In a discordant world, fossil fuels may still account for 77%, with coal alone powering more than half the system.
India currently imports 87% of its oil, 50% of its gas, and 26% of its coal, raising serious concerns around energy security. Experts caution that India’s path to net zero will depend on consistent alignment across policy, regulation, and private investment.
Coal: Still king in India’s power play
Despite a push for renewables, India’s coal demand is projected to surge 60% by 2050, driven by industrial expansion and rising electrification. While coal’s share in the energy mix may dip marginally, actual power generation from coal is expected to rise to 1,600 TWh by 2030.
India is ramping up domestic coal production through private investment and mine auctions. However, imported coal will remain vital due to its higher calorific value and lower ash content—attributes Indian coal still lacks. S&P projects thermal coal imports of 150–180 million tonnes annually through 2030, mainly for the non-power sector.
Solar rising, but won’t dethrone coal yet
Solar power in India is growing rapidly, with its share in electricity generation expected to nearly double from 8.5% in 2024 to 14.6% by 2030. However, this growth, while substantial, will not be enough to displace fossil fuels—particularly coal—as the backbone of India’s power grid in the near term.
Petrochemical giants bet on India amid global slump
India is attracting global petrochemical majors looking for growth amid a weak global demand outlook and excess capacity. Petrochemical consumption in India is projected to outpace GDP growth in FY26, positioning the country as Asia’s strongest demand engine.
Also Read: ReNew Energy to set up $2.57 billion solar, wind project in India
However, domestic producers are under pressure from cheaper imports, prompting a shift towards specialty chemicals and integrated value chains to stay competitive.
India at the heart of the global energy transition
India’s rise in the global energy order is not without contradictions. While it remains heavily reliant on fossil fuels, it is also pushing aggressively towards renewables and cleaner technologies. Its strategy mirrors the global energy narrative—ambitious, complex, and riddled with trade-offs.
