China’s oil product demand peaked last year and is set to drop this year and accelerate the decline in the coming years, a China oil researcher told Reuters on the condition of anonymity.
Chinese demand for petroleum products hit its peak in 2023 and is now set to drop by 1.1% annually through 2025, according to the researcher.
The decline is expected to accelerate later this decade, when China’s oil product demand is seen falling by 2.7% annually from 2025 to 2030, and by 3.2% every year between 2030 and 2035.
Analysts and oil industry executives have recently said that peak Chinese gasoline and oil product demand is near.
Earlier this week, Russell Hardy, chief executive of the world’s largest independent oil trader, Vitol Group, said that China’s gradual shift toward electric vehicles would bring about domestic gasoline demand peaking either this year or next.
“Gasoline is likely to peak this year or next year in China — not because nobody’s moving, but simply because the fleet is slowly changing towards electric vehicles,” Vitol Group’s CEO Russell Hardy told Bloomberg in an interview published on Monday.
Earlier this year, Vitol pushed back its expected timeline for global peak oil demand beyond 2030. Hardy said in February that a slower pace of the energy transition would push peak oil demand beyond 2030.
Nevertheless, Vitol sees weakening Chinese gasoline demand growth and diesel demand due to the electrification of transport and greater use of LNG for fueling trucks.
Demand for petroleum products in China could peak before next year, the research unit of the China National Petroleum Corporation (CNPC) forecast earlier in 2024. The projection is based on expectations that the energy transition will continue gathering speed, eliminating oil product demand growth.
China’s oil demand growth has been slowing due to weaker economic performance and a shift to electric vehicles and LNG-fueled trucks, oil industry executives said at the APPEC conference in Singapore on Monday.
By Tsvetana Paraskova for Oilprice.com
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