India Has the Potential to Fuel the Next Growth Cycle for Tankers

The tanker market is expected to see significant growth in the coming years, driven by India’s emergence as a major player in the global economy and its increasing oil and refining needs. India is set to be the largest single source of demand growth for oil between now and 2030, with plans to raise domestic refining capacity to 9 million barrels per day by 2030. However, significant new investment will be needed to achieve this goal, as the country currently has 5.8 million barrels per day of refining capacity.

While India is planning to add 1.1 million barrels per day of refining capacity by 2028, the goal of reaching 9 million barrels per day by 2030 seems challenging. Middle Eastern NOCs have explored building a mega refinery in India to rival existing facilities, but issues such as land acquisition have posed challenges. Despite this, downstream foreign investment in India is expected to increase as Chinese oil demand peaks this decade. Existing refinery investments in India are likely to meet domestic demand and maintain export volumes, impacting tanker markets significantly.

With little change in crude production, India is expected to see continued growth in feedstock imports and become more active in the Atlantic basin crude market. If India can achieve its goal of 9 million barrels per day of refining capacity, its impact on tanker markets will be even more pronounced. The country’s expansion in refining capacity and increased foreign investment are expected to drive growth in the tanker market in the near term, with potential for further expansion in the future.

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