By Tsvetana Paraskova of OilPrice.com
Oil demand in China, the world’s top crude importer, could peak as early as next year as the penetration of electric vehicles and LNG trucks is accelerating, state-owned China National Petroleum Corporation (CNPC) said on Tuesday.
At this time last year, CNPC expected a peak in oil demand coming to China by 2030.
Now, after a year of EVs and LNG-fueled trucks displacing some gasoline and diesel demand, respectively, the peak in China’s oil demand may occur five years earlier, in 2025, according to a report by CNPC economists carried by Bloomberg.
China’s oil demand growth has been slowing down 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 in September.
Although some of the weakness is attributable to weaker economic performance, the shift toward EVs and LNG trucks is removing some road fuel demand permanently, analysts say.
China’s shift toward EVs will bring about domestic gasoline demand peaking either this year or next, according to Vitol Group’s CEO Russell Hardy.
“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,” the top executive of the world’s largest independent oil trader told Bloomberg in an interview in September.
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.
The rise of electric vehicles and the growing use of LNG in trucking have combined with slower-than-expected economic growth and activity to dent China’s oil demand growth and undermine earlier forecasts of global oil demand this year.
