Global oil demand will not peak in the near future, but India’s vulnerability to high prices will increase with surge in its crude oil imports, the International Energy Agency (IEA) said.
Oil demand will continue to grow stronger this year, at about 1.5 million barrels per day, driven by petrochemicals and other sectors, IEA said.
“Indian oil imports will grow more and more driven by transportation, petrochemicals and other sectors. Indian economy’s vulnerability to international oil price will also increase. Some oil producing countries may have short term gain from very high prices; in medium and longer term, it is not good for sustainability of their economies,” IEA said.
Talking about single product (crude oil) producing countries, the agency said they should not be vulnerable to oil prices because if they crash their economies may well face serious challenges.
The inter-governmental agency pointed to flow of shale oil and gas in the markets and advance technologies like renewables to electric cars which may affect oil prices across the world.
On renewables, IEA said it is mainly solar PVs that are getting cheaper and as such many people are using solar.
The global oil market dynamics have changed substantially, IEA said, adding that if there is another price hike there will be a strong response from US shale oil production as also from Brazil and other developing countries.