Vitol: China remains the main driver of global oil demand despite energy transformation
The global head of Vitol’s research department said that China will continue to play a major role in the global oil market because it is focused on petrochemicals, even though fuel consumption for road transport in China peaks during energy transition.
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He said that "the growth next year will be enough to satisfy the global demand for plastics."
There is no doubt about it, this will be the driving force for oil demand in China as well as globally. This is because there is less decarbonisation in that area.
The oil consumption in China has barely increased in 2024, as the use of gasoline and diesel declined with the rapid rise of electric vehicles, and as liquefied gas replaced diesel for truck fuel.
Serio stated that "the view could be it's a driving factor of oil or that it's actually a underlying force for peak oil demand, to the extent the transition technologies have been successfully implemented in China."
It's important to place China in context with the global oil demand. We think it will continue to play a critical, important role.
Serio estimates that gasoline demand will grow by 22,000 barrels a day (bpd), compared to 268,000 bpd a year earlier, as sales of new energy vehicles surpass conventional cars for he first time.
Beijing's stimulus policies could influence the pace of China's gas demand decline in the coming years.
Serio stated that the cost of LNG in comparison to diesel fuel will determine whether or not it is used for trucking.
He said that LNG truck sales fell in September as the price difference between the supercooled fuel and diesel narrowed.
Serio reported that Vitol had pushed its peak oil forecasts for China back to 2030 due to a slower uptake of electric vehicles and a lower commitment to environmental goals.
He said that jet fuel and petrochemicals feedstocks, such as liquefied petrol gas and naphtha, will drive the global oil demand in the coming five years. (Reporting and editing by Himani Sarkar, Tom Hogue, and Colleen howe)
(source: Reuters)
