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High prices of fuels are likely to dampen near-term demand for energy, however, recovery is expected in the second half of calendar year 2022 (July-December).

Driven by a more broad-based pickup in economic activity as the country adapts to live with Covid-19 amid higher vaccination rates, India's oil demand in second half of calendar year 2022 is expected to be 275,000 barrel per day, said S&P Global Commodity Insights which was curated by analysts JY Lim and Kang Wu.

"More than 72 per cent of its population has received at least one dose of the vaccine, and about 61 per cent of its population has received both doses to be fully vaccinated. India has just started to give booster shots on April 10, and will be limited to front-line workers and those older than 60 who get them at government centres," the S&P Global Commodity Insights said.

For overall 2022, India's oil demand is expected to grow by 225,000 barrel per day, with growth expected to ease to 185,000 barrels per day in 2023.

"Gasoil demand is set to improve as manufacturing activity regains momentum and jet fuel use will also improve as international flights start to resume, though they are likely to remain well below capacity," it said.

However, there are still risks of downward adjustments as the Russian-Ukraine conflict continues to evolve as well as because of growing concerns of a global or regional economic recession.