• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 14 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 12 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 15 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 18 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 1 day U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 1 day Nord Stream - US/German consultations
  • 3 days An Indian Opinion on What is Going on in China
  • 4 days Can Technology Keep Coal Plants Alive and Well?
  • 5 days Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 17 hours Forecasts for Natural Gas
  • 1 day Australia sues Neoen for lack of power from its Tesla battery
  • 4 days Storage of gas cylinders
  • 5 days Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
China To Coal Miners: Raise Production Now

China To Coal Miners: Raise Production Now

Chinese authorities have ordered 72…

American Oil Drillers Are Facing A Sharp Rise In Costs

American Oil Drillers Are Facing A Sharp Rise In Costs

Oilfield services costs are soaring…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Fuel Demand In India Is Soaring Despite Pandemic

India, the world’s third-largest oil importer and consumer, turned from the worst-performing demand market in July into one of the fastest-growing fuel demand markets in November, lending support to oil prices together with strong demand in China and progress with vaccine development and rollout.  India’s demand for all types of petroleum products has nearly reached pre-COVID levels, prompting domestic refineries to crank up crude oil processing rates. 

The rebound in one of the world’s biggest oil growth drivers before the pandemic highlights the two-speed global oil demand recovery, with Asia driving higher consumption and consequently, oil prices, while Europe and the United States are reeling from renewed restrictions to fight record COVID-19 infections. India’s recovery is also indicative of the immediate support that strengthening oil demand in the key Asian markets, China and India, gives to oil prices, unlike vaccine news, which contains more forward-looking expectations of mass vaccinations boosting economies and hence, oil demand. 

In India’s case, fuel demand has been boosted by one of the effects of COVID-19 on customer preferences—people avoid public transportation and prefer the comfort and relative isolation from other people in their own vehicles. India continues to fight the pandemic and still has some restrictions in place on domestic bus and airline travel. This additionally boosts demand for gasoline and diesel for private vehicles. 

In four months, the trend in India’s fuel demand has dramatically changed. 

Related: Will Biden Seal The Fate Of The U.S. Shale Patch?

In July, Indian refiners were cutting processing rates because fuel demand—up from the lows in April and May—had slowed as fuel prices were higher and parts of India were again under local lockdowns, while the monsoon rain season was also stalling economic activity and transport. 

Shell’s chief executive Ben van Beurden said on the supermajor’s Q2 earnings call in July that India was the worst-performing market in terms of demand, while China continued to be resilient. 

“The worst-performing market is India, 45% down. So, we are dealing with a very wide tapestry of market recovery archetypes,” van Beurden said.

Four months later, Indian Oil Corporation (IOC) increased crude oil throughput of its refineries to 100 percent in November 2020, as consumption of all petroleum products has almost reached pre-Covid levels, the country’s biggest refiner and fuel retailer said earlier this month. 

“As we get closer to the Covid-19 vaccine roll-out, the fundamentals of the economy being strong, we see a rapid V-shaped recovery in the overall consumption of petroleum products,” IndianOil chairman SM Vaidya said.

Apart from IndianOil, two other state-held refiners now operate at 100 percent refining capacity, sources familiar with the matter told Bloomberg this week.  

Recovery signs had already emerged in October, with India’s consumption of petroleum products in October 2020 growing by 2.5 percent compared to October 2019, the first annual growth in the 2020-21 financial year, data from India’s Ministry of Petroleum and Natural Gas showed. Consumption rose by 14.8 percent from September to October, indicating a boost in economic activity, the ministry said. 

Currently, road vehicle traffic in India is surpassing pre-COVID levels, said ICRA Research, whose biggest shareholder is credit rating agency Moody’s. 

“This has been supported by the gradual unlocking of the economy, the recovery in the industrial and services sectors, limited availability of public transport (both bus and passenger rail) and preference for social distancing in personal mobility,” ICRA said in a report this month. 

The rebound in fuel demand in India, as well as in China, is in stark contrast with the demand patterns in major developed economies that have been battling the resurgence of the coronavirus. 

In the world’s top petroleum consumer, the United States, gasoline sales during the Thanksgiving week dropped by a staggering 8.4 percent, or by nearly 185 million gallons, from the previous week, bringing consumption to the lowest level for a Thanksgiving Week in 23 years, going back to 1997, according to the weekly survey of retail fuel stations by IHS Markit company OPIS. 

Until oil demand in major developed economies recovers to a more sustainable level, immediate oil price gains will hinge on demand from the major growth drivers in Asia, India and China.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on December 21 2020 said:
    The Asian crude oil market is the biggest in the world and is driven principally by China and India, the world’s largest and third-largest importers of oil.

    The Asian market has been strengthening with on the rebound of China’s economy and now India’s. The global economy is projected to grow by an estimated 5.4% in 2021 and 3.7% in 2022 led by emerging markets particularly China and India both of which are projected to grow in 2021 at 8% and 8.3% respectively according to projections from the IMF. This is giving a huge boost to global oil demand.

    I project that Brent crude could hit $60 in the first quarter of 2021 and $70-$80 in the third quarter. This trajectory will give an average price of $65-$70 in 2021 and test $100 by 2024.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News