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The International Energy Agency (IEA) has noted an unprecedented slowdown in the growth of fuel consumption in China, a trend rarely seen in countries at a similar stage of economic development, according to Bloomberg. The agency attributes this change to a rise in alternative transportation options and shifts in China’s economic landscape, suggesting that fuel demand may have already reached its peak or is close to leveling off.
“For China’s fuel growth trajectory to be leveling off at this early stage of development is without historical precedent,” the IEA stated. “This slide is likely to accelerate over the medium-term, which would be sufficient to generate a plateau in total China oil demand this decade.”
China’s consumption of key fuels – gasoline, jet fuel/kerosene, and gasoil – dipped slightly to 8.1 million barrels per day in 2024, according to the IEA’s monthly Oil Market Report. This marks a small drop from 2021 levels and is just above consumption in 2019.
Looking ahead to 2025, the IEA predicts a modest increase of 210,000 barrels per day in China’s oil demand, but it notes that fuel consumption could already be on the decline. Factors contributing to this include a downturn in the construction sector, which has historically driven gasoil demand, and weaker consumer spending, which has traditionally been linked to gasoline use and personal mobility.
A surge in electric vehicle adoption, now accounting for half of new car sales, is expected to curb fuel demand by roughly 250,000 to 300,000 barrels per day in 2024. Additionally, the broader use of compressed and liquefied natural gas in freight transportation is estimated to have reduced the demand by around 150,000 barrels per day.
The expansion of public transportation, particularly high-speed rail, has also contributed to the slowdown in fuel use. Since 2019, these shifts have collectively reduced demand growth by approximately 1.2 million barrels per day, with further reductions of around 400,000 barrels per day anticipated this year, largely due to the growing adoption of electric vehicles.