Sinopec, a top refiner, claims that China's oil demand will peak in 2027.

Sinopec, the state-owned refinery, said that China's oil demand will peak in 2027. This is due to a decline in diesel and gasoline consumption, which has slowed down global oil markets.

Sinopec stated that the peak oil demand in 2027 will not exceed 800 million metric tonnes, or 16 millions barrels of crude oil per day. Sinopec predicted peak China oil demand at 800 million tonnes around 2026-2030.

The energy sector in China faces new uncertainty by 2025, with the return of President-elect Donald Trump to the White House bringing the prospect of increased trade tensions and a potential disruption of Iranian oil exports. This was stated by Wang Pei. He is the deputy general manager at the Sinopec Economics and Development Research Institute.

Trump is expected tighten sanctions on Iran. Iran exports about 1.5 million barrels per day of oil, mainly to China and independent refiners.

Wang, speaking at Sinopec's annual Outlook event in Beijing, said: "We would like to remind everyone that Trump's Iran Policy is uncertain."

Trump could, however, also reduce tensions between Ukraine and the Middle East by removing a certain risk premium.

Analysts have stated that the rapidity of China's transition to peak oil, driven by the switch towards electric vehicles, and the growth of trucks powered by LNG, has surprised the industry. Crude imports are on course to peak by 2025.

Sinopec reported that the 800 million-ton high compares to the 750 millions tons of oil to be consumed by 2024. The demand will drop 10 million tonnes from last year, the only decline in the past two decades.

Sinopec stated that the petrochemicals industry will consume more oil in the future than the transportation sector. This sector is expected to account for 55% of the oil consumed in 2060 compared to 22% in 2024.

In 2025, diesel demand will fall by 5.5%, to 174 millions tons. This is because 22% of trucks sold in the first quarter of 2024 were LNG-fueled.

Electric vehicles will replace about 26 million tonnes or 15% of gasoline in 2025.

Only aviation fuel is expected to increase in use next year by 7%, to 45.5 millions tons.

Sinopec, Asia’s largest refiner, said that China’s natural gas consumption could peak earlier, but at a level higher than what it predicted last year.

China's gas consumption will reach 570 billion cubic meters (bcm), and then plateau between 2035-2040 at 620 bcm. Sinopec's last-year forecast put the plateau around 2040 at 610 billion cubic metres.

Sinopec said that natural gas consumption will be 458 billion cubic meters in 2025. This is an increase of 6.6%. The company attributed the growth to the increased use of LNG in the trucking industry, the additions of new gas-powered generating capacities, and the stronger demand in the industrial and residential sector.

The report also raised its estimate of China's carbon dioxide emissions due to energy-related activities, predicting a peak between 10,8 billion and 11,12 billion tons by 2030. It predicted a peak of around 10.1 billion tonnes between 2026- 2030. 1 metric ton is equal to 7.3 barrels

(source: Reuters)