High fuel prices are expected to dampen energy demand in the near term, but a recovery is expected in the second half of calendar year 2022 (July-December).
Driven by a broader upturn in economic activity as the country adjusts to live with Covid-19 amid higher vaccination rates, India’s oil demand in the second half of the calendar year 2022 is expected to be 275,000 barrels per day, said S&P Global Commodity Insights which was curated by analysts JY Lim and Kang Wu.
“Over 72% of its population has received at least one dose of the vaccine, and around 61% of its population has received both doses to be fully vaccinated. India has just started giving boosters on April 10 and will be limited to frontline workers and people over 60 who get them at government centers,” said S&P Global Commodity Insights.
For 2022 as a whole, India’s oil demand is expected to increase by 225,000 barrels per day, with growth expected to moderate to 185,000 barrels per day in 2023.
“Diesel demand is expected to improve as manufacturing activity picks up momentum and jet fuel usage will also improve as international flights begin to resume, although they are likely to remain well below. capacity,” he said.
However, risks of downward adjustments remain as the Russian-Ukrainian conflict continues to evolve and due to growing fears of a global or regional economic recession.
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