One of the most understated stories of 2026, and the reason why oil (and gas) aren't trading at persistently nosebleed levels (ignore diesel for the time being), has been China's unexpectedly weak oil demand. And while there has been much speculation surrounding the reason for this chronically weak oil demand, ranging from an accelerated - and offsetting - SPR drain, to a dramatic economic slowdown behind the scenes (or even in front of the scenes based on the latest dismal economic data), today for the first time we got a notable justification for this phenomenon coming from none other than the head of the nation’s - and world's - largest refiner, who said that China’s oil demand probably peaked last year, earlier than previous estimates.
Clean energy development, electrification and low-carbon goals mean that the country’s oil demand has probably already crested, Sinopec Chairman Hou Qijun said Monday at an earnings briefing in Hong Kong, quoted by Bloomberg.
The company had previously forecast usage to top out in 2027, while the government is targeting oil and coal consumption to reach their limits during the current five-year plan period, which runs through 2030.
“Next year, even if the US-Iran conflict eases up, things might recover, but it won’t hit last year’s level,” Hou said. “So it’s very likely demand peaked last year.”
Since China is the world’s largest oil importer, an earlier start to reducing consumption would help rein in its world-leading emissions while raising questions for the world’s top crude drillers.
« Back to The Culture War
