Sinopec Sees China Oil Demand Falling 8.9% in 2026
Sinopec’s research arm projects China’s oil demand will fall 8.9% in 2026 from a year earlier, driven by higher oil prices and faster electric-vehicle adoption. The company estimates a roughly 600,000 barrels-per-day drop in average oil demand this year versus last, with gasoline and diesel consumption set to decline sharply while jet fuel edges up.
Why It Matters
The expected slide in transport fuel consumption is weighing on Sinopec’s earnings and is prompting the refiner to shift investment toward new energy and chemicals — a signal of structural change in China’s oil market driven by policy and market forces present in the source material.
Key Facts
- Source: Sinopec Economics & Development Research Institute (figures quoted by Reuters; reported by OilPrice.com)
- Projected total oil demand change (2026): Down 8.9% year-on-year
- Average oil demand change (this year vs last year): Down about 600,000 barrels per day
- Product breakdown (research arm estimates): Gasoline -8.7%; Diesel -11.4%; Jet fuel +1.3%
- Product breakdown (Sinopec first-half press release): Refined products -8.6% y/y; Gasoline -7.9%; Diesel -11.5%; Jet fuel +1.3%
Sinopec’s research arm forecasts a sharp fall in China’s oil consumption, projecting an 8.9% year-on-year decline in 2026. The institute estimates that average oil demand this year will be about 600,000 barrels per day lower than the prior year, and it assigns steep drops to key road fuels while expecting a small rise in jet fuel demand.
On a product basis, the research arm sees gasoline and diesel demand contracting substantially — with estimates in the report of about an 8.7% fall for gasoline and an 11.4% fall for diesel — while jet fuel is forecast to increase around 1.3%. Sinopec’s own first-half earnings release gave similar figures for the period, reporting total refined product consumption down 8.6% year‑on‑year, gasoline down 7.9%, diesel down 11.5% and jet fuel up 1.3%, the latter attributed to holiday travel and the rebound of international routes.
Sinopec and analysts attribute the weakening road-fuel demand to a combination of higher crude and fuel prices amid the Iran-related conflict and an accelerating shift toward electric vehicles that reduces road transport fuel usage. The company also pointed to disruptions tied to the Strait of Hormuz period this year — including sharply reduced crude imports and a temporary ban on fuel exports in the spring and early summer — as factors that both tightened markets and hastened longer-term demand shifts.
The decline in domestic fuel sales has weighed on Sinopec’s earnings for about two years, prompting the refiner to plan a strategic pivot. The company says it will allocate more capital to new energy and chemicals through the end of the decade to bolster revenue and profit growth as domestic fuel consumption falls to its lowest level in nearly ten years. The figures and commentary were reported by OilPrice.com, citing Sinopec and Reuters.
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