China's oil consumption could peak in five years at a daily level of around 16 million barrels, a senior Sinopec executive has forecast, as quoted by Reuters.
Ma Yongsheng, acting chairman of the state oil major, also said gas consumption will likely peak around 2040.
As for oil, Ma said, over the longer term, the commodity will become primarily a raw material for chemicals rather than for fuels. Sinopec will take an active part in the reduction of China's oil consumption by "forcefully promoting" lower-carbon operations and reducing energy-intensive business activities.
"We will accelerate the transition from oil to chemicals and boost production of high-end materials...and raise lower-carbon feedstocks to cut down the carbon footprint throughout the manufacturing cycle," the executive said at an event in Beijing.
At the moment, China is the world's top oil importer, taking in more than 10 million barrels daily as of August. As such, the country's consumption levels are a major oil price mover as was most recently seen when Beijing announced it would sell some oil from its strategic reserve.
The news of the unprecedented move sparked worry that the country was sending a pointed message to OPEC+ with regard to their efforts to keep international prices elevated despite a couple of strong bearish factors such as a production decline in the United States caused by the last two hurricanes and a gas crunch in Europe.
Meanwhile, however, the immediate outlook for global oil demand remains bullish. Both OPEC and the International Energy Agency earlier this month issued updates on demand that saw it rising to more than 100 million bpd by the second quarter of next year.
"Although much of the OPEC and IEA adjustments are longer-term in nature, they are nonetheless worthy of some buying interest despite significant demand risk across the balance of this year related to the Delta variant (of the coronavirus,)" according to Jim Ritterbusch from Ritterbusch and Associates, as quoted by Reuters.
By Irina Slav for Oilprice.com
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1- China’s oil consumption has grown at an average of 5.1% per annum during 2010—2020. By 2026 it would have grown from 14.23 million barrels a day (mbd) in 2020 to 18.241 mbd and will continue to grow at that rate well into the future.
2- China’s economy is projected to double its size from $26.66 trillion in 2021 based on purchasing power parity (PPP) to $53.32 trillion by 2035.
3- And despite the fact that China is the world’s largest investor in renewables, it will never achieve net-zero emissions by 2060 or ever.
4- Oil consumption goes hand in hand with economic growth. If China’s economy is projected to grow annually at 7%-8% for the next 20 years, one would expect oil consumption to grow too.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
How about we start there first, eh?