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China’s demand for diesel has peaked and gasoline demand will soon follow, research from state energy giant CNPC has revealed. Reuters cites CNPC’s research division as also saying that crude oil demand in the country will stop growing at a level of 690 million tons annually—13.8 million bpd—which is set to happen in 2030. Gasoline demand will peak around 2025.
China is currently the world’s biggest crude oil importer, but this may soon change as Beijing tightens environmental regulations, dampening demand for fuels. Economic growth is also slowing, further hurting demand. While economic growth could rebound, the environmental regulations are likely to stay in place as the country battles one of the worst pollution levels in the world.
As part of these efforts, China is shifting from oil towards gas as a fuel for a variety of vehicles, but notably for heavy-duty trucks that account for a large portion of diesel demand in the country and 20 percent of China’s fleet. Electric buses are also growing in popularity in China.
In April, Bloomberg reported that electric bus fleets across Chinese cities are expanding at the rate of 9,500 every five weeks. Last year, 99 percent of all electric buses in the world—some 380,000 of them—were in China. This fleet could displace almost 280,000 bpd in fuel demand in the future.
At the same time, however, Chinese refiners are expanding their processing capacity, which, according to CNPC’s research, will bring about an excess of 50 million tons of fuel by 2050. In the short term, however, things are looking up for refiners: crude oil imports rose by 6 percent in August from July, to the highest level since May, as independent refiners—the so-called teapots—returned to the market after a few months of depressed oil purchases. Domestic production has also been growing: in August; Chinese producers pumped 16 million tons, or 3.77 million bpd.
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.