Poten's Weekly Opinion: India Goes Shopping

Mar 17 2021


How will India’s diversification drive impact crude tankers?

In terms of oil demand and impact on the tanker market, India has long been overshadowed by China. There are two key contributing factors that explain the difference. First, China’s economy and oil demand has grown much more quickly in recent decades, partly because they had a much larger population and faster GDP growth. However, that may be about to change. India’s population is growing much faster than China’s. Various international organizations such as the World Bank and the United Nations estimate that India’s current population growth rate is in the range of 1.2-1.3%, while China’s population growth has slowed to about 0.5% per annum. At this rate, India’s population could overtake China’s as early as 2022. By 2030, India’s population may be 50-100 million larger than China’s.

 

The second reason that tanker owners traditionally follow China’s oil demand much more closely than India’s is the proximity of the latter to the Middle East. India has traditionally bought the vast majority of its crude from their next-door neighbors in the Middle East. A barrel of crude going from the Arabian Gulf to India generates much less ton-mile demand than the same barrel going to China. That is why the recent reports that India intends to reduce its dependence on Middle East OPEC and buy more crude oil from suppliers in the Atlantic Basin is music to the ears of the tanker owners.

 

Download The Weekly Opinion

 



Related News

Poten's Weekly Opinion: Pandemic Headwinds

(May 12 2022)

Lockdowns lead to oil demand slowdown.



Indonesia seizes tanker over palm oil export ban violation

(May 12 2022)

The Indonesian Navy has seized a tanker that was carrying palm oil out of the country in violation of an export ban. Indonesia, the world's largest producer of palm oil, prohibited its export to rein in skyrocketing domestic prices and shortages. ...



Tanker Sunny Liger heading for Gibraltar with Russian oil

(May 12 2022)

A controversial tanker carrying Russian oil is heading for Gibraltar.



EU drops plan to stop tankers moving Russian oil anywhere

(May 12 2022)

The European Union is set to soften its sanctions package on Russian oil exports after a weekend of wrangling.



Russian tanker stuck in Greece switches flag ‘to Avoid Sanctions’

(May 12 2022)

A Russian-flagged oil tanker stuck off the Greek island of Evia since April 8 has changed its flag, most likely to avoid EU and US sanctions on Moscow.



June July 2025

Tanker Operator Athens report - MEPC 83 explained - decarbonisation by Norwegian shipowners