March 8, 2024 [Oil Price]- Oil demand growth in China is about to weaken in the coming years as electric vehicle uptake and a switch from oil to LNG for trucks displaces a solid chunk of demand, the research arm of CNPC has forecast.
Growth in EV sales and LNG-powered trucks would shave between 10% and 12% off the country’s demand for gasoline and diesel just this year, Lu Ruquan, president of CNPC’s Economics and Technology Research Institute, said as quoted by Bloomberg.
He added that overall oil demand will remain on an upward trajectory, however, largely thanks to a continued expansion in petrochemicals, Lu told Bloomberg in an interview.
The state oil major’s research division said back in December that China’s oil demand could peak by 2030, at a level of between 780 and 800 million metric tons annually. In that report, the Economics and Technology Research Institute also said that by 2030, petrochemicals will account for 30% of oil demand. This still leaves the bulk of demand in the fuels segment. Over the longer term, demand is seen falling to 220 million tons annually, which should happen by 2060.
In a more recent update, from this month, the CNPC institute forecasted that oil product demand could peak as soon as 2025. The projection is based on expectations that the energy transition will continue gathering speed, eliminating oil product demand growth.
“With new productive forces — which refer to technological innovation, data, smart or intelligent technologies and the like — driving an overall increase in productivity and enhancing new dynamics for economic growth, overall demand for petroleum is on an upward trajectory this year,” the head of the oil market research division of the CNPC’s Economics and Technology Research Institute said, as quoted by China Daily, last Friday.
China currently depends on imports for 70% of its crude oil demand, which makes it vulnerable to potential price shocks when supply swings.
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