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Imagenation

A Crude Affair
Is India set to overtake China as Asia’s biggest crude guzzler?

Asia’s two largest oil markets have been the biggest drivers for crude demand, but things may likely change now. China’s slowing demand is likely to propel India as the fastest growing petroleum market in 2018, according to a report by Moody’s. India is set to emerge as Asia’s fastest growing petroleum product market with consumption expected to grow by 6% in 2018, according to the report. In contrast, China’s oil demand is set to halve to 2.5-3% from 6% in 2017. India’s crude oil demand, which averaged 4.4 MMbpd in 2016, is expected to rise 3.0% to 4.5 MMbpd in 2017. Even so, India has had its own share of hiccups especially during this monsoon, with fuel demand decreasing to 6.1% in August owing to heavy rainfall cutting down the use of diesel. Nonetheless, rising passenger vehicle sales, increasing air travel, and a general rise in transportation demand will continue to keep fuel demand buoyant. The International Energy Agency, in fact, believes India’s crude oil demand growth rate will be the highest by 2040. Whether that indeed will be the case is a story for another day.

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