Sinopec Sees China's 2026 Oil Demand Falling 8.9% on EV Adoption

China's oil demand is projected to fall by 8.9% year-over-year in 2026, a decline of 600,000 barrels per day (bpd), according to a forecast from Sinopec's Economics and Technology Research Institute. The institute attributes the significant drop in the world's largest oil importer to the combination of high crude prices and the accelerating shift toward electric vehicles (EVs).

A Turning Point for Demand

The research arm of the state-owned energy giant stated that China's peak oil demand will have already occurred in 2025, signaling a structural shift in the country's energy consumption. The decline is expected to be most pronounced in road transportation fuels.

• Gasoline demand in 2026 is forecast to decrease by 8.7% from the previous year.
• Diesel demand is expected to see an even steeper decline of 11.4%.
• In contrast, aviation fuel demand is projected to grow by a modest 1.3% as air travel continues its recovery.

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Long-Term Outlook and Refining Impact

The institute's long-term projections suggest a sustained downturn in oil consumption. It forecasts that China's oil demand will fall below 750 million tons by 2030 and ultimately shrink to approximately 300 million tons by 2060, aligning with the nation's carbon neutrality goals.

This demand outlook is already affecting the downstream sector. According to Sinopec data, domestic crude processing in the second and third quarters fell by 5.4% year-over-year to 697 million tons, with refinery utilization rates dropping to 73.2%. The country's total refining capacity is expected to reach 952 million tons per year in 2026. The institute also noted a corresponding shift toward natural gas, projecting that industrial gas demand will increase by 50 billion cubic meters by 2030.