Oil Prices Surge Amid Energy Transition Buzz, India in Focus
Policy shifts, import diversification, and rising domestic consumption put India at the center of the global oil and gas market
New Delhi, Dec 20: After years of forecasts predicting a peak in global oil demand amid a shift toward renewables, oil and gas made a quiet but significant comeback in 2025, with India emerging as a central driver of consumption.
Major energy outlooks from BP, McKinsey, and the IEA pushed peak oil into the 2030s while revising 2050 demand upward. Forecasters consistently highlighted India as the epicenter of global demand growth, outpacing China and Southeast Asia combined.
The revival of oil’s prominence in 2025 was fueled by policy delays, infrastructure bottlenecks, and geopolitical tensions. European nations leaned more heavily on fossil fuels amid supply shortfalls and high prices due to the ongoing Russia-Ukraine war. In the US, fossil-fuel-friendly policies reinforced this trend.
India’s oil and gas sector witnessed shifting import patterns, rising domestic demand, and policy reforms aimed at strengthening energy security. Russian crude remained a key source despite international pressure, accounting for over a third of imports for most of the year. Imports dropped under sanctions in late November but continued via non-sanctioned Russian suppliers.
The country also diversified supply, with US crude imports surging alongside expanded LNG and LPG trade. Domestic policy changes, including the Petroleum and Natural Gas Rules 2025, simplified licensing and attracted investments in exploration and production.
India’s refining capacity grew steadily, positioning the country as a global refining hub. Upstream production remained constrained by aging fields, prompting partnerships like ONGC’s collaboration with BP to revive Mumbai High output. Natural gas consumption also increased, aided by pipeline expansion and city gas distribution.
On prices, 2025 was unusually stable. Brent crude largely traded between USD 60–70 per barrel, easing slightly to USD 59–60 by mid-December, despite sanctions, tariffs, and geopolitical tensions. Supply from non-OPEC producers, disciplined OPEC+ management, and subdued demand growth in China and Europe contributed to the calm.
For India, stable prices allowed the government to raise excise duties on petrol and diesel without affecting retail prices, helping replenish revenues.
As 2025 closes, the global oil and gas industry faces a nuanced outlook, balancing geopolitical risks, evolving demand, climate pressures, and strategic pivots among major producers as it heads into 2026.
