China’s oil demand, the largest in the world, could reach its peak as early as next year, driven by the rapid rise of electric vehicles (EVs) and LNG-powered trucks, according to a report by state-owned China National Petroleum Corporation (CNPC) on Tuesday.
This marks a significant shift from CNPC’s prediction last year, when the company expected China’s oil demand to peak by 2030. After a year of growing EV and LNG truck adoption, which have reduced the need for gasoline and diesel, CNPC now forecasts that peak oil demand could occur by 2025.
The slowdown in China’s oil demand growth is also linked to weaker economic performance. At the APPEC conference in Singapore last September, oil industry leaders discussed how the rise of EVs and LNG trucks is permanently decreasing the demand for road fuels.
Vitol Group’s CEO, Russell Hardy, believes China’s gasoline demand will peak either this year or next. “Gasoline is likely to peak this year or next year in China — not because people are driving less, but because the fleet is gradually shifting towards electric vehicles,” Hardy explained in an interview with Bloomberg.
Earlier this year, Vitol extended its global oil demand peak forecast beyond 2030, citing a slower pace of the energy transition. However, the company acknowledges that China’s gasoline and diesel demand is weakening due to the growing adoption of electric vehicles and LNG in the trucking sector.
The combined effects of these factors, along with slower-than-expected economic growth, are reshaping China’s oil demand outlook and challenging previous predictions for global oil consumption.
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