• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days How Far Have We Really Gotten With Alternative Energy
  • 4 days By Kellen McGovern Jones - "BlackRock Behind New TX-LA Offshore Wind Farm"
  • 12 days Natron Energy Achieves First-Ever Commercial-Scale Production of Sodium-Ion Batteries in the U.S.
  • 12 days Bad news for e-cars keeps coming
  • 2 hours Solid State Lithium Battery Bank
  • 11 days The United States produced more crude oil than any nation, at any time.
  • 14 days RUSSIA - Turkey & India Stop Buying Russian Oil as USA Increases Crackdown on Sanctions
Can the U.S. Avoid an Energy Crisis?

Can the U.S. Avoid an Energy Crisis?

Current U.S. energy policies favoring…

Russia's Seaborne Oil Exports Plunge

Russia's Seaborne Oil Exports Plunge

Russia’s crude oil exports have plunged to…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

The New Trucking Trend Transforming Chinese Oil Demand

  • China's sales of LNG trucks have surged in recent months due to lower prices and new emission standards.
  • The shift to LNG-powered trucks is limiting diesel use for transportation in China, slowing overall oil demand growth.
  • Abundant new LNG supply coming to the market after 2026 is expected to further accelerate the adoption of LNG-fueled trucks in China.

Passenger electric vehicles are not the only alternative in the transportation sector that are poised to displace part of China’s oil demand. LNG-fueled heavy-duty vehicles are also set to limit diesel use for transport, especially now that LNG is cheaper than diesel. 

Chinese sales of LNG trucks have been booming in recent months, as global and Asian LNG prices are much lower than the record highs seen at the peak of the energy crisis in the summer of 2022. 

A surge in LNG trucking is set to eat into Chinese oil demand for transportation and slow overall oil demand growth in the world’s top crude oil importer.  

The prospect of abundant new LNG supply coming to the market after 2026, especially from Qatar’s huge expansion projects, makes analysts optimistic about the acceleration of the Chinese LNG-fueled truck market as growing LNG supply could keep prices low enough to continue displacing diesel.  

Colder winters and LNG supply outages could, of course, lead to new spikes in LNG prices, derailing the LNG trucking revolution. For now, though, the prospects of the LNG-powered heavy-duty vehicle market look bullish and much rosier than two years ago. 

Soaring LNG Truck Sales 

China’s sales of LNG-fueled trucks have been rising every month, compared to year-ago periods, since 2022, while LNG vehicles accounted for some 7% of the heavy-duty fleet at the end of 2023, per data compiled by BloombergNEF

The shift to LNG-powered trucks has been more prominent amid soaring diesel prices last year. 

So far this year, Chinese sales of LNG trucks have jumped year-over-year, thanks to new emission standards in force since July 2023 and to low LNG prices, according to data by OilChem cited by Mysteel. 

China’s overall apparent LNG consumption rose by 35.5% between January and April, mostly driven by growth in demand from the transportation sector. 

Vehicle LNG consumption made up half – or 49.97% -- of total Chinese LNG consumption, per OilChem data. Vehicle LNG demand surged by nearly 40% in the first four months of 2024, as sales of heavy duty LNG vehicles soared amid falling LNG prices. 

During the same period, China’s sales of heavy-duty LNG trucks jumped by 144.25%, as both imported and domestic LNG prices were lower than gasoil prices, OilChem noted. As a result, the cost of a truck running on LNG was considerably lower than the cost of a diesel-fueled truck last year and early this year.  

There has been a high positive correlation between heavy-duty LNG truck ownership and apparent LNG consumption in China, OilChem says. 

Chinese firm CIMC Enric Holdings Limited, which supplies LNG on-vehicle cylinders for heavy-duty vehicles, said earlier this year that “In recent years, the LNG heavy-duty truck has emerged as a frontrunner in the commercial vehicle sector due to its cost-effectiveness, with sales soaring and market share growing steadily.” 

Sales of LNG heavy-duty trucks surged by 307% annually in 2023, CIMC said citing statistics data. 


China’s Oil Demand Growth Slowing

As a result of growing EV fleets and rising LNG-fueled trucking industry, China’s oil demand growth is set to weaken in the coming years, the research arm of CNPC forecast earlier this year. 

Growth in EV sales and LNG-powered trucks would shave between 10% and 12% off the country’s demand for gasoline and diesel this year alone, Lu Ruquan, president of CNPC’s Economics and Technology Research Institute, said as quoted by Bloomberg.

Overall oil demand will remain on an upward trajectory, however, largely thanks to a continued expansion in petrochemicals, Lu told Bloomberg in an interview. 

China Petroleum & Chemical Corporation, or Sinopec, expects oil demand in China to peak before 2027, according to the 2024 edition of the China Energy Outlook 2060 that the world’s biggest refiner published at the end of last month. 

At the same time, Chinese natural gas usage is rising and is projected to peak by 2040, while coal consumption, which anchors the country’s energy security, will stop growing around 2025, according to Sinopec. 

The shipping sector, where LNG is one of the alternatives to fuel oil, could also help dent oil usage, analysts say. 

“LNG bunkering has been on an upward trend, and we can expect this momentum to continue,” Jayendu Krishna, a director at Drewry Maritime Services in Singapore, told Bloomberg.  

Based on the vessel order books now, LNG is “likely to remain a dominant alternative fuel,” Krishna added. 

LNG Prices To Determine Oil Demand Trend in Transportation 

While the current outlook of LNG-fueled heavy-duty vehicles is bullish, due to lower LNG prices, renewed high volatility and price spikes in LNG could slow the shift to alternative fuels in trucking, according to analysts.

Cold winters, supply outages and supply shortages, and fierce competition between Europe and Asia for LNG supply could raise global and Asian LNG prices, removing the current price incentive for a massive uptake of LNG-fueled trucks.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on June 12 2024 said:
    Even if for the sake of argument we accept that surging sales of LNG trucks in China could limit the demand for diesel, it still wouldn’t affect China’s crude oil imports since China exports huge volumes of petroleum products including diesel.

    Moreover, sales of LNG trucks haven’t yet taken off in major economies as in China.

    Dr Mamdouh G Salameh
    International Oil economist
    Global energy expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News