Indian oil and gas market to grow at CAGR of 5.20 percent

According to the report by Mordor Intelligence, as of 2024, the market size stands at an estimated 38.12 billion cubic meters, with projections indicating a rise to 49.12 billion cubic meters by 2029.

The India oil and gas market is a dynamic sector poised for significant growth and transformation in the coming years. As of 2024, the market size stands at an estimated 38.12 Billion cubic meters, with projections indicating a rise to 49.12 Billion cubic meters by 2029, reflecting a robust Compound Annual Growth Rate (CAGR) of 5.20 percent during the forecast period (2024-2029). This anticipated growth follows a downturn primarily triggered by the outbreak of the COVID-19 pandemic, which led to regional lockdowns and a notable decline in demand for refined petroleum products. However, the market has shown resilience and has rebounded to pre-pandemic levels, signalling a promising trajectory ahead.

Factors driving growth

Several factors are expected to underpin the growth of the Indian oil and gas market in the coming years. One of the key drivers is the increasing capacity of natural gas pipelines, which facilitates the efficient transportation of gas across regions, thereby enhancing accessibility and utilisation. Additionally, the rising demand for petroleum products, driven by various sectors including transportation, industrial manufacturing, and residential consumption, is expected to fuel market expansion. The oil and natural gas industry holds a pivotal position in the global energy landscape, serving as the primary fuel source and exerting considerable influence on the global economy. The intricate processes and systems involved in the production and distribution of oil and gas necessitate sophisticated technology and substantial capital investments, underscoring the industry’s complexity and significance.

Challenges ahead

Despite the promising growth prospects, the Indian oil and gas market faces challenges that may impede its growth trajectory. A notable concern is the nation’s heavy reliance on crude oil and natural gas imports to meet domestic demand. This dependence exposes the market to fluctuations in global crude oil prices and geopolitical risks, which can adversely affect supply dynamics and market stability. In particular, the high volatility of crude oil prices poses a significant challenge for stakeholders in the Indian oil and gas sector, necessitating strategic planning and risk management measures to mitigate adverse impacts.

Opportunities in the sector

Amidst these challenges, the Indian oil and gas market also presents opportunities for exploration and development, particularly in emerging areas such as gas hydrate discoveries in the Krishna-Godavari (KG) Basin. Significant findings of gas hydrates in the KG Basin have opened up possibilities for economically viable extraction, potentially revolutionising natural gas production in the region. The successful extraction of gas hydrates could unlock immense opportunities for companies operating in the Indian oil and gas sector, leading to a surge in production and bolstering energy security. This development underscores the importance of technological innovation and exploration activities in driving growth and diversification within the industry.

The India oil and gas market exhibits promising growth potential, driven by increasing pipeline capacity and rising demand for petroleum products. Despite challenges, including reliance on imports and price volatility, the industry remains resilient and poised for expansion. Furthermore, discoveries such as gas hydrates in the KG Basin present new opportunities for exploration and development, highlighting the evolving nature of the Indian oil and gas sector. As stakeholders navigate through the complexities and uncertainties, strategic investments in technology, exploration, and infrastructure will be crucial in unlocking the market’s full potential and ensuring sustainable growth in the years to come.