China's oil consumption growth is slowed by the transition to cleaner fuels.

Speakers at the APPEC Conference on Monday said that China's move towards low-carbon fuels, combined with a sluggish economic growth, are reducing the oil demand in the world's biggest crude importer.

Daan Struyven is the head of Goldman Sachs' oil research. He said that China's demand has dropped from 500,000 to 600,000 barrels a day in the five-year period before the COVID-19 outbreak, down to 200,000 barrels a day now.

Struyven explained that this is due to the increased use of LNG-powered trucks instead of diesel vehicles.

Struyven stated that "China is very focused on becoming the leader of the global energy transition sector, by pushing supply-side which makes the alternatives cheaper."

He also said that China is reducing its dependence on fossil fuel imports, which has a negative impact on oil prices.

China's oil consumption was particularly weak in the second quarter due to a slowing economy and lower refinery production.

Jeff Currie is the chief strategy officer for energy pathways, a U.S. investment company. He said, "There are two components to the LNG transition: the trucks and the economics."

Currie stated that roughly 150,000-200,000 barrels of lost growth in demand per day is due to the energy transition. The rest is due economic weakness and destocking oil inventories.

Oil prices have been under pressure this year due to concerns over weak oil demand from China and plans by OPEC+ producers of unwinding supply cuts. They recently reached a more than a year low.

Jim Burkhard is vice president of research at S&P Global Commodity Insights. He said that despite a bump in the fourth quarter 2024, Chinese liquids growth will remain lower. (Reporting and editing by Jacqueline Wong; reporting by Jeslyn lerh)

(source: Reuters)