 |
Louisiana Light • 2 days | 86.49 | -0.63 | -0.72% | ||
|
Bonny Light • 1 day | 88.40 | -0.92 | -1.03% | ||
|
Opec Basket • 2 days | 88.45 | +1.94 | +2.24% | ||
|
Mars US • 174 days | 77.26 | -1.51 | -1.92% | ||
|
Gasoline • 10 mins | 2.776 | +0.018 | +0.66% |
|
Bonny Light • 1 day | 88.40 | -0.92 | -1.03% | ||
|
Girassol • 1 day | 89.03 | -0.87 | -0.97% | ||
|
Opec Basket • 2 days | 88.45 | +1.94 | +2.24% |
|
Peace Sour • 24 hours | 76.01 | -0.55 | -0.72% | ||
|
Light Sour Blend • 24 hours | 79.06 | -0.55 | -0.69% | ||
|
Syncrude Sweet Premium • 24 hours | 86.01 | -0.55 | -0.64% | ||
|
Central Alberta • 24 hours | 76.41 | -0.55 | -0.71% |
|
Eagle Ford • 2 days | 79.29 | -0.04 | -0.05% | ||
|
Oklahoma Sweet • 2 days | 79.25 | -0.50 | -0.63% | ||
|
Kansas Common • 1 day | 73.75 | +0.75 | +1.03% | ||
|
Buena Vista • 2 days | 87.23 | -0.55 | -0.63% |
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Is China Headed To Peak Oil Demand?
The world's top oil importer, China, could be just years away from its own peak in domestic demand for oil products, Chinese refiners have started to warn, but consumer preferences and government policies about transport electrification and support for EVs are likely to determine whether Chinese domestic oil consumption will peak around 2025.
China's largest refiner, Sinopec, said at the end of last year that domestic demand for oil products would peak by 2025 due to COVID impacts and the rise of electric vehicles, Argus reported, citing Sinopec's research think-tank as saying in its annual report.
"China's oil products will enter a final growth phase before peaking in the next five years," the Economics and Development Research Institute (EDRI) at Sinopec said, as carried by Argus.
According to the research institute, gasoline demand in China will likely peak in 2025, while demand for diesel could peak as soon as this year.
However, the growing sales of SUVs—which consume more gasoline—in China could delay a peak in Chinese demand, Nathaniel Taplin of The Wall Street Journal writes.
SUVs consume on average over 20 percent more energy than a medium-size car for the same distance traveled, the International Energy Agency (IEA) says, noting that last year sales of SUVs rose in China, as well as in the United States and Europe. The share of SUVs in the vehicle fleet continues to rise in China.
"While China's oil use has a strong growth potential—given that China's per capita oil use is currently around one-third of OECD levels—future growth rates will be tempered by efforts to tackle air pollution," Michal Meidan, Director of the China Energy Programme at the Oxford Institute for Energy Studies, wrote in a comment in September 2020.
The government's recovery package and its focus on electrification will weigh on oil demand in the medium term, while a possible shift from road to rail transportation is set to reduce diesel demand, Meidan said.
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By Tsvetana Paraskova for Oilprice.com
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Tsvetana Paraskova
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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China will certainly peak in growth of oil consumption also, only accelerated by the exponential growth of the electric vehicle market.
The excising electricity network can possibly already deal with a 50% electric vehicle ownership in the country just by making use of the capacity at night or hours with extra renewables on the net (smart charge .... according to UK the electric net control chief) so we have plenty of time to adjust to the EV market penetration. People that say that the electricity network can not handle the change to electric vehicles did not study the issue (these statements are not accompanied with numbers) and literary push fear, uncertainty and doubt, better known as FUD.
So again, it is expected that the population decline will start this decade in China and will reach peak consumption of oil with that also.
And while it is China’s intention to drastically reduce emissions by its environmental policies and support for EVs, it will face the huge hurdle of expanding its electricity generation to accommodate both the normal needs of the people and the extra electricity needed to recharge the millions of EVs that are encouraged into the roads. How could such expansion be sourced: nuclear, hydrocarbons or solar?
Nuclear generation of electricity takes time and is costly. Solar alone is handicapped by its intermittent nature. Coal undermines China’s emission-mitigation policy. Still, it will continue to be used because it is a very important domestic energy asset.
China’s needs coal, natural gas, nuclear energy and solar energy to be able to meet the electricity needs of 1.4 billion of people let alone recharging EVs. This will certainly limit the penetration of EVs into China’s transport system.
In a nutshell, oil demand will never peak in China even by the turn of the century.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London