The unusual combination of rising fuel demand and expanding refining capacity is drawing global commodity traders to India, with companies such as Trafigura seeking long-term partnerships with national oil companies.
With consumption growth slowing in most major economies, trading executives said at the India Energy Week conference that they see opportunities across crude oil, refined fuels and liquefied natural gas (LNG).
“We think there is a huge opportunity in India,” Trafigura India CEO Sachin Gupta said, pointing to strong demand for diesel, gasoline and liquefied petroleum gas, adding that India would buy “significant quantities” of liquefied natural gas.
Mr. Gupta expects India’s oil demand to reach nearly 9 million barrels a day by 2050, up from about 5 million barrels a day now. On Friday, Trafigura announced it had signed a “landmark crude oil supply agreement” with Bharat Petroleum Corporation to supply Iraq’s Basra crude and Omani crude to India’s state-run refiner. BPCL has also signed a term agreement with TotalEnergies for procurement of UAE crude oil.
Rising demand Indian Oil Corporation (IOC), the country’s largest refiner, signed a five-year import deal with Trafigura last year to buy 2.5 million tonnes of LNG worth $1.3 billion to $1.4 billion.
SP Srivastava, the IOC’s head of marketing, told reporters at a briefing that by 2030, annual diesel demand is expected to increase by 2-3% and gasoline demand by 5-6%.
IOC Chairman AS Sahni said at India Energy Week that the company has signed a preliminary agreement with Paris-based Engie for LNG and other natural gas trading opportunities in the Asia-Pacific region.
Petronet LNG, a major gas importer, expects LNG imports to increase from about 25.5 million tons last year to 28 million to 29 million tons in 2026.
Trading giant Vitol expects most of India’s refinery output to be absorbed domestically.
“Half a million (barrels per day) of refining capacity will come online,” said Kieran Gallagher, Vitol’s head of Asia. “Apart from summer seasonality and exports, the majority of products derived from that capacity will be consumed domestically.”
Opportunities for traders also extend to petrochemicals, which remain structurally in short supply despite government estimates that production will rise by 29.62 million tonnes to 46 million tonnes by 2030.
(Reporting by Mohi Narayan and Nidhi Verma; Additional reporting by Anjana Anil and Tanay Dhumal; Editing by Mayank Bhardwaj and Kirsten Donovan)
