India’s end-use energy consumption is set to grow by 90% by 2050


Igor Sechin, Chief Executive Officer of Rosneft, Russia’s biggest oil producer, addressed key global business and political leaders at the Energy Panel of the 27th St. Petersburg International Economic Forum (SPIEF). In his keynote speech titled “Energy transition and phantom barrels: Abandon hope, all ye who enter here.  Not everyone will be taken to the bright future of the global energy industry!“, Igor Sechin provided a comprehensive analysis of the current state of the energy market and highlighted key challenges facing the industry.

During the speech, Igor Sechin laid special emphasis on the rapidly growing Indian economy and said “Over the next five years, India is projected to continue its strong economic momentum and become one of the top three largest economies in the world with a GDP of USD 5 trillion, and by 2050 will overtake the U.S. in terms of the size of the economy.” He further added that India’s end-use energy consumption is set to grow by 90% by 2050 – one of the fastest growth rates in the world.

Rosneft recently signed a term agreement with Indian Oil Company to increase oil supplies and diversify India’s oil grades. The Agreement took place during Igor Sechin’s recent visit to India. Indian companies (ONGC Videsh Ltd., Oil India Limited, Indian Oil Corporation, and Bharat Petroresources) have been owners of 49.9% of Rosneft’s subsidiary JSC Vankorneft since 2016.

Taking about the global preparation on energy transition, Rosneft CEO criticized the prioritization of the anthropogenic factor in climate change discourse and argues against the effectiveness of energy transition initiatives in addressing environmental concerns. Igor Sechin highlighted the insights of renowned physicist Pyotr Leonidovich Kapitsa, who predicted energy production challenges due to the inefficiency of alternative energy sources. Despite considering hydrogen as a promising clean fuel, Sechin pointed out current limitations in production technology, logistics, and market readiness.

Furthermore, Igor Sechin highlighted that while renewable energy accounts for less than 5% of global energy production and electric vehicles only make up approximately 3%, consumption of oil, gas, and coal has continued to rise. He argues that the lack of profitability in green energy initiatives is leading to divestment from the traditional energy sector, exacerbating the challenge of transitioning to sustainable energy sources.

Igor Sechin underlined that the energy transition should be well-balanced and focused on addressing the interests of the majority that will ensure the growth of energy consumption in the coming years, i.e. developing countries. He also noted that to achieve energy security, it is necessary to ensure the sufficiency, affordability and reliability of energy sources.

Aggressive promotion of the “green agenda” actually means declaring an energy war on the majority of the world’s population, and overcoming energy inequality is impossible without reliable supplies of oil and gas, said Rosneft CEO Igor Sechin.

According to Igor Sechin, demand for electricity will grow driven by developing countries that have yet to overcome energy poverty. While speaking at the Energy panel, Igor Sechin reminded that it is in the developing countries of Asia and Africa that we are witnessing the greatest population growth and, as a consequence, a rapid increase in the need for energy resources. Obviously, in this situation, a reduction in global consumption of fossil resources would automatically mean that the problem of hunger and energy poverty would not only persist, but also worsen. Giving up oil will also mean giving up the modern way of life. Conversely, for many countries, increased oil consumption means access to the benefits of civilization, Igor Sechin concluded.

He further stated that with OPEC+ agreement seems to have little impact on the oil market, as observed by the stockpiling of reserves by both Western and Middle Eastern companies, potentially anticipating significant market changes. These “phantom barrels” could offset the effects of voluntary production cuts by major OPEC members, evidenced by market quotations declining after recent ministerial decisions. Moreover, the looming uncertainty surrounding the upcoming U.S. presidential elections, where public sentiment is influenced, among other things, by fluctuations in gasoline prices, implies a heightened level of market volatility. The possibility of regulatory changes within the industry, contingent upon election outcomes, underscores emerging risks, prompting major players to explore alternative strategies.

According to Rosneft CEO, developing countries will be the main drivers of oil consumption in the coming decades. By 2030, demand growth in this group of countries is expected to account for 95% of global consumption growth in aggregate. The highest growth in oil demand is expected in Asian countries, which are Russia’s main trading partners.