China’s Oil Demand Expected to Decline by 600,000 Barrels Per Day in 2026
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China's Oil Demand Expected to Decline by 600,000 Barrels Per Day in 2026
- China's oil demand is projected to decrease by 600,000 barrels per day in 2026, marking an 8.9% fall from the previous year, according to the Sinopec Economics & Development Research Institute.
- This anticipated reduction is attributed to high crude prices, partly due to the ongoing US-Iran conflict, and the accelerated adoption of electric vehicles in China.
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China, the world’s largest oil importer, is expected to see its oil demand shrink by 600,000 barrels a day in 2026, a significant 8.9% decrease from the prior year. This forecast, issued by the Sinopec Economics & Development Research Institute on September 9, 2026, indicates a third consecutive annual decline in the country’s oil consumption.
The primary factors contributing to this downturn are elevated crude oil prices and the rapid expansion of electric vehicle (EV) adoption across China. The US-Iran conflict has been a major driver of oil price volatility and supply disruptions. The International Energy Agency characterized the situation caused by the war as the “greatest global energy security challenge in history” by May 2026, with Brent crude prices surging. The conflict has led to disruptions in global oil supplies, particularly with the closure of the Strait of Hormuz, a critical waterway for over 20% of the world’s oil trade.
The rise of electric vehicles in China has also played a substantial role in reducing oil demand. China’s EV fleet displaced an estimated 0.4 million barrels per day of gasoline demand in 2024, a figure that has been steadily increasing. By the first half of 2026, the oil consumption displaced by EVs in China exceeded the UK’s total oil consumption over a six-month period. Electric passenger vehicles accounted for 67% of new car sales by June 2026, and electric truck sales more than doubled in both 2024 and 2025, reaching 26% of new truck sales in 2025. This rapid electrification of transport has led some analysts to suggest that China may have already passed its peak oil consumption in 2025.