China’s Oil Demand Growth Is Set for a Significant Slowdown in 2024

Crude oil demand in China is set to slow down sharply next year, a survey among 12 industry analysts and consultants carried out by Bloomberg has suggested.

According to the results of the survey, oil demand in the world’s biggest importer will decline to 500,000 barrels daily in 2024 as post-pandemic recovery loses steam. This is just a third of the demand growth rate recorded this year.

“Next year, growth will be returning to the normal trajectory with pandemic factors fading. The outlook isn’t so encouraging,” Sinopec senior expert Ke Xiaoming told Bloomberg, adding “Petrochemicals are supported by extra capacity, but are facing poor margins.”

The survey follows a forecast released earlier this week by CNPC, which projected that oil demand in China will peak by 2030, at a level of between 780 and 800 million metric tons annually.

In its forecast, the CNPC 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.

This year, China led the world’s oil demand growth, accounting for 75% of the total additional demand, according to the International Energy Agency. The annual growth rate increase was also impressive, at 10%, per the CNPC’s Economics and Technology Research Institute. However, it is unlikely to be repeated next year.

“This year’s oil demand growth at over 10% will never be repeated,” an oil analyst with the ETRI said, as quoted by Bloomberg.

According to FGE, 2024 could mark the start of a structural slowdown in Chinese oil demand as EVs reduce demand for fuels. Even with a slowdown, demand for gasoline and diesel will still increase in 2024, by almost 4% for gasoline and 5% for diesel, according to Rystad Energy.

By Charles Kennedy for Oilprice.com

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