India’s oil demand growth is forecast to fall to its lowest level in a decade, excluding the pandemic year of 2020, as geopolitical tensions and supply disruptions continue to pressure energy markets. Kpler estimates that India’s oil consumption will increase by only 78,000 barrels per day in 2026, nearly 40% lower than its pre-conflict forecast.

The slowdown comes amid the ongoing Middle East conflict, which has significantly disrupted global energy flows and contributed to a sharp rise in crude oil prices. The closure of key shipping routes and reduced exports from the region have tightened supply conditions, pushing Brent crude prices substantially above pre-war levels and increasing fuel costs for major importing nations such as India.

India, the world’s third-largest oil consumer and importer, remains highly dependent on overseas crude supplies. Higher fuel prices have begun affecting consumption patterns, particularly in transport and industrial sectors. State-owned refiners have implemented modest increases in retail fuel prices, but these adjustments have been insufficient to fully offset the surge in international crude prices.

The broader global environment has also weakened demand expectations. Several agencies and market analysts have revised down oil demand growth forecasts due to slower economic activity, elevated energy costs, and persistent supply-chain disruptions. Industry experts note that higher crude prices are increasingly leading to demand destruction across major consuming regions.

Despite the near-term slowdown, India is still expected to remain one of the key drivers of long-term global oil demand growth. Structural factors such as urbanization, industrial expansion, rising mobility, and economic growth are projected to support higher energy consumption over the coming years. However, the current geopolitical crisis has temporarily disrupted that trajectory, resulting in a significant moderation in demand growth during 2026.