The global oil market is shifting towards a surplus phase, according to Oil & Natural Gas Corporation (ONGC) Chairman Arun Singh. Speaking during a panel discussion on Thursday, Singh highlighted that major oil-producing nations currently possess an estimated 9 million barrels per day (mbpd) of spare capacity, which can be easily activated.
Oil Market Outlook
Singh noted that the world’s leading oil producers, including the United Arab Emirates (UAE), Saudi Arabia, Iraq, Guyana, the United States (US), and Canada, have significant untapped capacity amidst muted global demand. He projected that the last quarter of 2025 may witness an excess supply of 1 million barrels per day unless producers decide to withhold some of this capacity from the market.
Global Oil Production Trends
According to the International Energy Agency (IEA), global oil production currently stands at approximately 103.3 million barrels per day. The OPEC+ cartel has deliberately kept over 5 mbpd of its production capacity on hold to stabilize prices amid weakening demand. The IEA’s latest report also highlights that oil’s share in total energy demand has dropped below 30% for the first time in 50 years, significantly down from its peak of 46%. Moreover, global oil demand grew by only 0.8% in 2024, indicating a slowdown.
India’s Oil Demand Outlook
Despite the global decline in demand, Singh emphasized that India’s oil demand remains resilient, projected to grow at a steady 3-4%. While other countries, including China, are experiencing declining oil consumption due to the rapid shift toward electric vehicles, India remains dependent on oil imports. Singh pointed out that global oil majors are scaling back exploration, but India has no option but to continue aggressive exploration to reduce import reliance.
With this evolving landscape, India is expected to play a crucial role in the global energy market while navigating the challenges of supply-demand dynamics.
