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There is considerable divergence among global institutions on when oil demand might peak. However, a recent report released by China’s largest energy producer suggests that China’s oil demand could peak as early as 2025, five years earlier than previously anticipated. As a pioneer in the clean energy transition, could China’s experience with peaking oil demand be seen as an exception on a global scale?
While there is disagreement among leading organizations about future oil demand projections, a shared belief is that developing economies, particularly China and India, will be the key drivers of demand growth. In contrast, demand in developed economies may gradually decline over the coming years.
Nonetheless, according to information released on December 10 by China National Petroleum Corporation (CNPC), China’s oil demand may peak in 2025. This represents a significant shift from earlier predictions of a 2030 peak. The report indicates that China’s oil demand is likely to reach 770 million tons in 2025 but gradually decline to 240 million tons by 2060. A major contributor to this shift is the rapid adoption of electric vehicles (EVs) and liquefied natural gas (LNG) trucks, which have significantly impacted oil demand.
China’s oil demand growth has slowed considerably in recent years, a trend attributable to both weakened economic performance and the energy transition toward EVs and LNG-powered trucks. During the Asia-Pacific Petroleum Conference (APPEC) held in Singapore in September, industry executives highlighted that while some of the slowdown can be attributed to weaker economic activity, the adoption of EVs and LNG trucks has permanently removed some road fuel demand.
Wu Mouyuan, deputy director of CNPC’s Research Institute of Economics and Technology, emphasized this point when responding to questions from reporters. While OPEC forecasts an additional 2.5 million barrels of oil demand growth in China in the future, Wu suggested that the country might reach its oil demand peak as early as next year. He further noted that the traditional oil industry’s role will undergo substantial changes in the future.
In a similar vein, Russell Hardy, CEO of Vitol Group—the world’s largest independent oil trader—told Bloomberg in an interview that China’s domestic gasoline demand might have already peaked this year or will do so next year. He stated, “Gasoline demand in China is likely to peak this year or next year—not because people are traveling less, but because the vehicle fleet is gradually shifting toward electric vehicles.”
Although China may reach its peak oil demand earlier than expected, Vitol Group takes a more cautious view when it comes to the global oil demand peak. In February, Hardy had said that slower-than-expected progress in the energy transition could delay the global oil demand peak until after 2030.
The International Energy Agency (IEA) holds the most aggressive forecast, predicting that global oil demand will peak at 105.6 million barrels per day in 2029 before beginning to decline starting in 2030. In comparison, the International Monetary Fund (IMF) anticipates a global peak by 2040 or earlier, while the Organization of the Petroleum Exporting Countries (OPEC) has pushed its forecast to 2045, predicting demand will reach 109.8 million barrels per day by then.
As for the Chinese market specifically, Hardy highlighted the combined effect of widespread EV and LNG truck adoption, along with slower economic growth, as the main factors leading to weaker growth in both gasoline and diesel demand. These factors have even altered previous predictions about global oil demand this year. According to CNPC’s latest projections, these low-carbon energy technologies and the electrification of road transportation will have a lasting impact on both China’s and the world’s oil demand trajectory.
