Weaker fuel demand and depressed refining margins in 2024 resulted in the first annual decline in China’s refinery throughput in over 20 years, excluding the pandemic lockdown year of 2022, government data showed on Friday.
Chinese refiners processed on average 14.13 million barrels per day (bpd) of crude oil last year, down by 1.6% compared to the record 14.7 million bpd processed in 2023 when China emerged from the pandemic lockdowns, per data from China’s National Bureau of Statistics cited by Reuters.
Oil demand in China was lackluster in 2024, with consumption growth slowed, due to weaker economic performance and a shift to electric vehicles (EVs) and LNG-fueled trucks.
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.
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 for 2024.
Crude oil imports into China also declined last year, for the first time in some 20 years, excluding the pandemic lockdown period. The average import level stood at 11.04 million bpd in 2024, down by 1.9% from 2023, customs data showed earlier this week.
It bears noting that in 2023, Chinese crude oil imports ran at a record pace after the end of the lockdowns, with the daily average at 11.28 million barrels.
The growth rates of the last 20 years, however, are unlikely to return as China’s economy moves to a more measured pace of growth as it matures.
Both China’s state energy giants CNPC and Sinopec have predicted peak oil demand growth on the horizon, with CNPC forecasting it for this year and Sinopec sees the peak coming in 2027.
