For much of the past decade, the global energy narrative revolved around one central assumption: oil demand was approaching an irreversible peak as renewables scaled rapidly and policy pressure intensified. In 2025, that assumption began to unravel. Major energy outlooks revised their projections, geopolitical realities reasserted themselves, and India emerged as the anchor of global oil demand growth.

Leading forecasters including BP, McKinsey, and the International Energy Agency have all pushed projected peak oil demand well into the 2030s, while simultaneously revising 2050 oil demand estimates higher. The common thread across these reports is India. Every major outlook now identifies India as the epicentre of global demand growth, with incremental energy consumption projected to exceed that of China and Southeast Asia combined over the next decade.

This shift reflects a broader reassessment of the pace and feasibility of the energy transition. Policy delays, infrastructure bottlenecks, and capital constraints have slowed the rollout of renewables in several large economies, while geopolitical tensions have reinforced the importance of energy security over idealised transition timelines.

The revival of the “Oil is King” narrative in 2025 was not driven by a single event, but by a convergence of structural and political factors. European economies, once at the forefront of decarbonisation efforts, leaned more heavily on fossil fuels as supply disruptions and elevated energy costs persisted amid the Russia–Ukraine war. In the United States, President Donald Trump’s renewed fossil-forward stance further reinforced oil and gas investment and production.

Against this backdrop, India’s role became increasingly central. The country’s oil and gas sector in 2025 was shaped by rising demand, shifting import patterns, regulatory reforms, and a renewed focus on energy security. Despite sustained international pressure, India continued to rely heavily on crude imports, with Russian oil remaining a key source for most of the year.

Russian crude accounted for over one-third of India’s imports through much of 2025, feeding domestic refineries that supply petrol, diesel, and other petroleum products. Even after the US escalated pressure on New Delhi to curb Russian purchases - including the imposition of a 50 percent tariff on Indian goods - flows continued largely uninterrupted. It was only after sanctions were enforced on major Russian exporters Rosneft and Lukoil in late November that imports moderated, falling from around 1.7–1.8 million barrels per day to below 1 million bpd.

Crucially, Russian oil itself was not sanctioned, making predictions of a complete halt to Indian imports unrealistic. Refiners instead pivoted to non-sanctioned Russian entities to maintain access to discounted crude.

India’s continued appetite for oil underscores a fundamental reality often glossed over in global transition debates: for large, fast-growing economies, energy security and affordability remain paramount. Demand trends in 2025 reinforced this point, with India’s oil consumption growth outpacing China’s and positioning the country to account for a significant share of global demand growth through the next decade.

At the same time, India diversified its energy sourcing. US crude imports surged, particularly after tariff tensions escalated, while LNG and LPG trade expanded steadily. This diversification reflects a strategic effort to reduce overdependence on any single supplier while retaining cost advantages where available.

Domestically, policy also moved in step with these shifts. The notification of the Petroleum and Natural Gas Rules, 2025 introduced a modernised regulatory framework aimed at simplifying licensing and attracting upstream investment. This reform signals recognition that reducing import dependence requires sustained exploration and production activity, not just downstream expansion.

On the supply side, India continued to expand its refining capacity, reinforcing its position as a global refining hub. However, crude oil and natural gas production remained under pressure due to ageing fields. To address this, state-owned Oil and Natural Gas Corporation partnered with BP as a technical collaborator to revive output at the Mumbai High fields - a move that reflects both urgency and pragmatism in sustaining domestic production.

Natural gas consumption also grew in 2025, supported by pipeline network expansion and a wider city gas distribution footprint. This aligns with India’s stated transition goals, positioning gas as a bridge fuel rather than a replacement for oil in the near term.

For Indian markets, the re-emergence of oil as a stable and predictable input had tangible fiscal and macroeconomic effects. Brent crude traded largely within a narrow USD 60–70 per barrel range for most of the year, easing further to around USD 59–60 by mid-December. This stability persisted despite wars, sanctions, tariffs, and shipping disruptions - an unusual calm underpinned by rising non-OPEC supply, disciplined OPEC+ output management, and subdued demand growth in China and Europe.

For major importers like India, this price environment provided breathing room. As seen during the COVID period, the government raised excise duties on petrol and diesel without passing higher costs to consumers, using the decline in crude prices to offset tax increases. The additional revenue helped support fiscal priorities, including income tax relief, without stoking inflation.

For a broader perspective on global demand outlooks and policy shifts, readers may refer to recent analyses from the International Energy Agency.