China's 2026 Oil Demand to Fall 8.9% on EV Growth, Sinopec Forecasts

China's oil demand is projected to drop by 8.9% in 2026, a decline of 600,000 barrels per day from the previous year, according to a new forecast from the Sinopec Economics & Development Research Institute. The research arm of the state-owned oil giant attributes the expected slowdown to the rapid adoption of electric vehicles and sustained high crude prices in the world's largest oil-importing nation.

Peak Demand and Long-Term Outlook

The report suggests that China's oil demand peaked in 2025, marking a significant turning point for global energy markets. This forecast has major implications for oil producers and traders who have long relied on robust Chinese growth to absorb supply.

Looking further ahead, the Sinopec institute projects a continued structural decline in the country's oil consumption. It expects demand to fall below 750 million tons by 2030 and eventually shrink to approximately 300 million tons by 2060 as China pursues its long-term decarbonization goals.

Fuel-Specific Breakdown

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The forecast indicates that the decline in 2026 will be driven primarily by road transportation fuels, a direct consequence of the expanding EV fleet. In contrast, aviation fuel is expected to see modest growth.

• Gasoline demand: forecast to decrease by 8.7% year-over-year.
• Diesel demand: projected to drop by 11.4% year-over-year.
• Jet fuel demand: expected to rise by 1.3% year-over-year.

Refining Sector Impact

This projected demand destruction is already affecting China's vast downstream sector. Sinopec reported that the country's crude processing fell 5.4% to 697 million tons during the second and third quarters, causing the national refinery utilization rate to drop to 73.2%. China's total refining capacity stood at 952 million tons per year in 2026, according to the institute.