{"id":66283,"date":"2025-03-11T11:53:53","date_gmt":"2025-03-11T18:53:53","guid":{"rendered":"https:\/\/energi.media\/?p=66283"},"modified":"2025-03-11T11:53:53","modified_gmt":"2025-03-11T18:53:53","slug":"opinion-oil-demand-for-fuels-in-china-has-reached-a-plateau","status":"publish","type":"post","link":"https:\/\/energi.media\/opinion\/opinion-oil-demand-for-fuels-in-china-has-reached-a-plateau\/","title":{"rendered":"Opinion: Oil demand for fuels in China has reached a plateau"},"content":{"rendered":"<p><em>This article was published by the <a href=\"https:\/\/www.iea.org\/commentaries\/oil-demand-for-fuels-in-china-has-reached-a-plateau\" target=\"_blank\" rel=\"noopener\">International Energy Agency<\/a> on March 11, 2025.<\/em><\/p>\n<p><em><strong>By <a class=\"a-link a-link--small \" href=\"https:\/\/www.iea.org\/contributors\/ciaran-healy\" data-focus-tabbed=\"\" data-panel-open=\"\"><span class=\"a-link__label\">Ciar\u00e1n Healy, Oil Market Analyst<\/span><\/a><br \/>\n<a class=\"a-link a-link--small \" href=\"https:\/\/www.iea.org\/contributors\/rebecca-mckimm\" data-focus-tabbed=\"\" data-panel-open=\"\"><span class=\"a-link__label\">Rebecca McKimm, China Programme Manager<\/span><\/a><br \/>\n<a class=\"a-link a-link--small \" href=\"https:\/\/www.iea.org\/contributors\/ivo-walinga\" data-focus-tabbed=\"\" data-panel-open=\"\"><span class=\"a-link__label\">Ivo Walinga, China Programme Officer<\/span><\/a><\/strong><\/em><\/p>\n<div class=\"m-block__content\">\n<h4 class=\"m-block__title f-title-5\">China\u2019s era of rapid oil fuels growth appears to be at an end<\/h4>\n<\/div>\n<div class=\"m-block__content f-rte f-rte--block\">\n<p>As the Chinese economy and domestic transport sector undergo significant transformations, demand for the most widely consumed oil-based fuels \u2013 including gasoline, jet fuel and diesel \u2013 declined marginally in 2024. What\u2019s more, China\u2019s combined consumption of these fuels of almost 8.1 million barrels per day (mb\/d) was 2.5 per cent below 2021 levels and only narrowly above those in 2019.<\/p>\n<p>With the overall Chinese economy pivoting from manufacturing to services-based growth and as the adoption of electric vehicles expands in the transport sector, the data strongly suggest that the combustion uses of petroleum fuel in China have already reached a plateau and that the potential for future growth may be very limited.<\/p>\n<p>Overall Chinese oil demand continues to increase, with growth dominated by\u00a0<a href=\"https:\/\/www.iea.org\/commentaries\/china-s-petrochemical-surge-is-driving-global-oil-demand-growth\" rel=\"noopener noreferrer\">petrochemical feedstocks<\/a>, which are converted into plastics and fibres rather than burnt as fuels. Oil demand for petrochemicals in China rose by almost 5 per cent in 2024 as new plants came online, a trend that is expected to continue in the next few years. However, while China was responsible for more than <a href=\"https:\/\/www.iea.org\/commentaries\/china-s-slowdown-is-weighing-on-the-outlook-for-global-oil-demand-growth\" rel=\"noopener noreferrer\">60 per cent of global increase in overall oil demand between 2013 and 2023<\/a>, it represented less than 20 per cent of last year\u2019s rise, largely as a result of its slowdown in fuel use.<\/p>\n<figure id=\"attachment_66284\" aria-describedby=\"caption-attachment-66284\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-66284\" src=\"https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.40.35\u202fAM-1024x529.png\" alt=\"\" width=\"1024\" height=\"529\" srcset=\"https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.40.35\u202fAM-1024x529.png 1024w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.40.35\u202fAM-300x155.png 300w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.40.35\u202fAM-768x396.png 768w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.40.35\u202fAM-1536x793.png 1536w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.40.35\u202fAM-2048x1057.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-66284\" class=\"wp-caption-text\"><em>To see an animated version of this graph, <a href=\"https:\/\/www.iea.org\/commentaries\/oil-demand-for-fuels-in-china-has-reached-a-plateau\" target=\"_blank\" rel=\"noopener\">click here<\/a>.<\/em><\/figcaption><\/figure>\n<div class=\"container \" data-component=\"blocks:text\">\n<div class=\"m-block m-block--text s-intersected\">\n<div class=\"m-block__content f-rte f-rte--block\">\n<p>Underpinned by China\u2019s national policies focused on energy security, industrial activity and controlling pollution, incentives for electric and low-emissions vehicles have boosted adoption, significantly reigning in fuel demand. The Chinese government aims to reach a peak in carbon dioxide (CO<sub>2<\/sub>) emissions before 2030 and for the economy to achieve carbon neutrality before 2060. Forecasts by the Economics &amp; Technology Research Institute of China National Oil Corporation (CNPC ETRI), are slightly more bearish than ours and show total oil demand reaching a turning point in 2025 and declining thereafter.<\/p>\n<p>Last year\u2019s decline in China\u2019s combustion of petroleum fuels happened despite a 12 per cent surge in jet\/kerosene use, as air travel completed its post-lockdown rebound. We expect another narrow decline in total fuel use in 2025, a trend that is likely to accelerate over the <a href=\"https:\/\/www.iea.org\/reports\/oil-2024\" rel=\"noopener noreferrer\">medium term<\/a>. This would likely result in a plateau in total China oil demand later this decade, despite burgeoning demand for petrochemical feedstocks.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"container \" data-component=\"blocks:text\">\n<div class=\"m-block m-block--text s-intersected\">\n<div class=\"m-block__content\">\n<h4 class=\"m-block__title f-title-5\">Structural shifts in China\u2019s economy are reducing fuel requirements<\/h4>\n<\/div>\n<div class=\"m-block__content f-rte f-rte--block\">\n<p>A plateau in China\u2019s demand for fuels is significant, and unusual, because it is taking place a middle-income country that continues to post robust GDP growth. Given the size of its economy, China uses relatively little fuel compared with higher-income countries. China\u2019s demand for all three products combined remains lower than US demand for gasoline alone. This is despite very strong growth during the 2010s in Chinese fuel demand, which rose by 75 per cent between 2009 and 2019. By comparison, fuel use in other major emerging markets continues to climb, with both Indian and Brazilian consumption growing by about 4 per cent last year.<\/p>\n<p>The disparity in consumption levels is highlighted by the fact that the OECD, whose member countries collectively match China\u2019s total population, used four times as much of these products as China did in 2024. There is no historical precedent for a levelling off in the fuel demand growth trajectory at this stage. Perhaps the closest historical analogue is Korea\u2019s mid-90\u2019s stabilisation in consumption amid rapid GDP growth, which took place when per capita fuel use was more than three times higher than it is in China today. Korean fuel demand has scarcely grown in the decades since, even as the country moved into high-income status. Such muted developments highlight the limitations in making oil demand projections based on convergence in outcomes between very different economies.<\/p>\n<figure id=\"attachment_66285\" aria-describedby=\"caption-attachment-66285\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-66285\" src=\"https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.42.09\u202fAM-1024x529.png\" alt=\"\" width=\"1024\" height=\"529\" srcset=\"https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.42.09\u202fAM-1024x529.png 1024w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.42.09\u202fAM-300x155.png 300w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.42.09\u202fAM-768x397.png 768w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.42.09\u202fAM-1536x793.png 1536w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.42.09\u202fAM-2048x1058.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-66285\" class=\"wp-caption-text\"><em>To see an animated version of this graph, <a href=\"https:\/\/www.iea.org\/commentaries\/oil-demand-for-fuels-in-china-has-reached-a-plateau\" target=\"_blank\" rel=\"noopener\">click here<\/a>.<\/em><\/figcaption><\/figure>\n<div class=\"container \" data-component=\"blocks:text\">\n<div class=\"m-block m-block--text s-intersected\">\n<div class=\"m-block__content f-rte f-rte--block\">\n<p>The slowdown in fuel consumption growth has followed a combination of structural changes in the Chinese economy and the rapid deployment of alternative transport technologies. The economy is undergoing a period of moderating growth and restructuring. China reported GDP growth of\u00a0<a href=\"https:\/\/www.stats.gov.cn\/sj\/zxfb\/202502\/t20250228_1958817.html\" target=\"_blank\" rel=\"noopener noreferrer\">5<\/a> per cent\u00a0in 2024 (<a href=\"https:\/\/www.economist.com\/finance-and-economics\/2025\/01\/17\/china-meets-its-official-growth-target-not-everyone-is-convinced\" target=\"_blank\" rel=\"noopener noreferrer\">4.2<\/a> per cent\u00a0in nominal terms), lagging its pre-pandemic trend and led by high-tech and clean energy manufacturing growth (<a href=\"https:\/\/www.rand.org\/pubs\/commentary\/2025\/02\/focus-on-the-new-economy-not-the-old-why-chinas-economic.html\" target=\"_blank\" rel=\"noopener noreferrer\">9 per cent in 2024<\/a>). A slump in the construction sector, historically a cornerstone of gasoil use, alongside sluggish consumer spending, which is closely associated with personal mobility and gasoline demand, has meant that recent GDP gains have been less fuel-intensive than in the past.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"container \" data-component=\"blocks:text\">\n<div class=\"m-block m-block--text s-intersected\">\n<div class=\"m-block__content\">\n<h4 class=\"m-block__title f-title-5\">China\u2019s transport technologies already reshaping demand for oil<\/h4>\n<\/div>\n<div class=\"m-block__content f-rte f-rte--block\">\n<p>Electric vehicles currently account for about half of car sales in China, undercutting 3.5 per cent of new fuel demand in 2024, while the use of compressed and liquified natural gas in road freight displaced another 2 per cent. China has been providing subsidy support to purchases of so-called \u201cnew energy vehicles\u201d (NEVs) since 2009, promoting its automotive manufacturing industry, and reducing air pollution. A trade-in policy, introduced in April 2024 and expanded in 2025, continues to drive growth in China\u2019s EV sales. Meanwhile, highly competitive Chinese automakers are also making gains in international markets.<\/p>\n<figure id=\"attachment_66286\" aria-describedby=\"caption-attachment-66286\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-66286\" src=\"https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.43.24\u202fAM-1024x552.png\" alt=\"\" width=\"1024\" height=\"552\" srcset=\"https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.43.24\u202fAM-1024x552.png 1024w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.43.24\u202fAM-300x162.png 300w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.43.24\u202fAM-768x414.png 768w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.43.24\u202fAM-1536x828.png 1536w, https:\/\/energi.media\/wp-content\/uploads\/2025\/03\/Screenshot-2025-03-11-at-11.43.24\u202fAM-2048x1104.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-66286\" class=\"wp-caption-text\"><em>To see an animated version of this graph, <a href=\"https:\/\/www.iea.org\/commentaries\/oil-demand-for-fuels-in-china-has-reached-a-plateau\" target=\"_blank\" rel=\"noopener\">click here<\/a>.<\/em><\/figcaption><\/figure>\n<p>There has also been a substantial expansion in the provision of public transport, especially high-speed rail (HSR). Under the current 14<sup>th<\/sup>\u00a0Five-Year Plan (2021-2025), China aims to expand its HSR network, already the largest in the world,\u00a0<a href=\"https:\/\/www.gov.cn\/xinwen\/2022-01\/24\/content_5670112.htm\" target=\"_blank\" rel=\"noopener noreferrer\">to 50 000 km<\/a>\u00a0by the end of 2025 and\u00a0<a href=\"https:\/\/english.www.gov.cn\/news\/202501\/02\/content_WS67764b48c6d0868f4e8ee732.html\" target=\"_blank\" rel=\"noopener noreferrer\">to 60 000 km<\/a>\u00a0by 2030. This year, China State Railway Group plans to invest\u00a0<a href=\"https:\/\/www.globaltimes.cn\/page\/202501\/1326186.shtml#:~:text=China%20Railway%2C%20the%20operator%20of,lines%20into%20operation%20in%202025.\" target=\"_blank\" rel=\"noopener noreferrer\">CNY 590 billion<\/a>\u00a0(USD 80.8 billion) into new railway infrastructure, with the expansion of HSR seen as complementary to\u00a0<a href=\"https:\/\/www.nber.org\/papers\/w33489\" target=\"_blank\" rel=\"noopener noreferrer\">rising EV use<\/a>. Total kilometres travelled by long-distance rail passengers rose by 7 per cent between 2019 and 2024. Over the same period, the use of urban metro networks increased by 17 per cent \u2013 or more than 10 million journeys per day \u2013 according to <a href=\"https:\/\/metrodb.org\/\" target=\"_blank\" rel=\"noopener noreferrer\"><em>MetroDB<\/em><\/a> data. Combined, these trends likely incrementally reduced 2024 demand by a further 1.5 per cent.<\/p>\n<p>In all, various forms of substitution have avoided oil demand growth of around 15 per cent (or 1.2 million barrels per day) in China since 2019 and will likely avoid a further 5 per cent this year, mainly due to accelerating EV penetration. These trends have major impacts on the use of premium fuel products, which are central to refinery profitability. In contrast, most petrochemical feedstock demand is generally priced at a discount to crude oil or supplied from natural gas liquids (NGLs).<\/p>\n<p>These shifting demand patterns create pressure on refiners, in China and elsewhere, as well as on underlying crude oil demand, while simultaneously providing an indispensable outlet and substantial growth opportunities for soaring US NGL production. In this respect, developments in China prefigure important aspects of our\u00a0<a href=\"https:\/\/www.iea.org\/reports\/oil-2024\" rel=\"noopener noreferrer\">medium-term oil market projections<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>This article was published by the International Energy Agency on March 11, 2025. By Ciar\u00e1n Healy, Oil Market Analyst Rebecca McKimm, China Programme Manager Ivo Walinga, China Programme Officer China\u2019s era of rapid oil fuels <a class=\"mh-excerpt-more\" href=\"https:\/\/energi.media\/opinion\/opinion-oil-demand-for-fuels-in-china-has-reached-a-plateau\/\" title=\"Opinion: Oil demand for fuels in China has reached a plateau\">[Read more]<\/a><\/p>\n<\/div>","protected":false},"author":6,"featured_media":66288,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"footnotes":""},"categories":[6],"tags":[91,216,611,14,95,565],"class_list":{"0":"post-66283","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-opinion","8":"tag-china","9":"tag-energy-transition","10":"tag-evs","11":"tag-featured","12":"tag-fossil-fuels","13":"tag-iea"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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