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Crude oil demand in China is set to peak in 2030, until then driven by robust petrochemicals demand, research from state oil giant CNPC has suggested.
This is a revision on 2020 research from the same organization, CNPC Economics & Technology Research Institute, which at the time saw oil demand peaking at 730 million tons annually in 2025. Now, the institute expects demand to peak at 780 million tons, Reuters has reported.
Fuel demand, however, will peak years before crude oil demand, ETRI also said. It now sees gasoline, diesel, and kerosene fuel demand peaking in 2025 at some 390 million tons per year as the electrification of transport grows in the world’s largest market for electric vehicles.
Coal consumption will also peak around 2030, the research organization also forecast, seeing the peak at around 3.6-4 billion tons. By 2050, coal generation capacity will only be used as backup, ETRI researchers said.
Natural gas will be the last fossil fuel to peak in terms of demand. According to the CNPC Economics & Technology Research Institute, this will happen in 2040, at levels of 650 billion cubic meters annually.
The gradual peak will, according to leaders in Beijing, enable a "gradual withdrawal of traditional energy sources” that “should be based on the establishment of safe and reliable of new energy sources".
China is the world’s largest importer of crude oil and consumer of coal. The pandemic dented its appetite for fossil fuels for a while but it quickly recovered and demand rebounded strongly, driving the rally in oil prices last year.
Next year, however, will start slowly as regards Chinese oil imports. According to a recent Bloomberg report, containment measures against the coronavirus as well as a tough stance on air pollution and a clampdown on independent refiners will result in lower oil imports during the first quarter. The report cited research from energy consultancy FGE, which has forecast average imports of 10.7 million bpd in March.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
The second reason is that China’s economy which is already the largest in the world based on purchasing power parity (PPP) is also projected to keep growing well into the future underpinned by its Belt and Road Initiative (BRI) and the sheer need to feed 1.4 billion people. This needs ever increasing volumes of crude oil.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London