India’s oil consumption, alongside China, Indonesia and Vietnam, is expected to be adversely impacted by the economic fallout of escalating trade tensions, said the World Bank on Tuesday.
Globally, oil consumption is anticipated to rise by just 0.7 million barrels per day in both 2025 and 2026, which is around half of the average annual growth between 2015 and 2019.
The World Bank also expects Brent oil price to average $64/bbl in 2025, and further decline to $60/bbl in 2026, due to slower global economic growth amidst rising trade tensions and uncertainty.
“Higher commodity prices have been a boon for many developing economies, two-thirds of which are commodity exporters,” said Indermit Gill, World Bank Group’s chief economist and senior vice president for development economics.
“But we’re now seeing the highest price volatility in more than 50 years. The combination of high price volatility and low prices spells trouble,” he added.
Global commodity prices are forecasted to fall by 12% in 2025, followed by a further 5% decrease in 2026. In nominal terms, prices will remain higher than pre-pandemic levels, but when adjusted for inflation, they are likely to dip below the average seen between 2015 and 2019, according to the report titled ‘Commodity Markets Outlook’.
Looking ahead, global coal consumption is projected to grow in 2025 and 2026, largely driven by India, the World Bank noted.
“Among the major producers, India is the only country where output is expected to increase, supported by government policy,” it said.
India’s coal consumption declined by a third to 70 million metric tonnes in 2024, while production rose by 80 mmt. On a global scale, the consumption growth slowed to about 80 mmt in 2024, “less than a third of the increase recorded over the previous two years”, according to the World Bank.
India is expected to be the primary driver of coal demand growth, with renewable energy meeting only a limited portion of the country’s growing electricity needs, it added.
