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MNI INTERVIEW: China Crude Oil Demand To Slow In 2024

MNI (Beijing)

China’s consumption and importation of crude oil will slow to low single digit percentage growth in 2024 from 2023's 11.5% y/y increase as base effects fade and the uptake of electric vehicles increases, a leading Chinese energy expert has told MNI, noting industrial demand will remain robust.

“EVs will substitute roughly 10 million tonnes of gasoline this year, up marginally over last year given increasing coverage,” said Lin Boqiang, dean at the China Institute for Energy Policy, Xiamen University.

But strong growth in other sectors, such as petrochemicals, will support overall appetite and drive imports marginally higher this year, Lin added.

Government plans to limit crude refining capacity to 1 billion metric tonnes by 2025 will have limited impact given overall activity remained supportive of demand, he continued.

Petroleum consumption reached a record 756 million tonnes in 2023 as the country emerged from Covid-zero, while imports increased 11.0% to 563.99 million tonnes, according to a China National Petroleum Corporation Economic and Technical Research Institute report.

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PetroChina expects China’s crude oil demand to peak at about 790 million tonnes a year by 2030.

However, Lin cautioned against longer-term assessments, noting strong manufacturing growth and artificial intelligence (AI) energy demands added uncertainty.

“Energy and electricity demand are growing rapidly therefore stronger policies, especially in the petrochemical sector, are expected to be implemented to keep the 2030 carbon peak and 2060 neutrality goals on track,” Lin continued. “Fast expansion in the chemical sector has boosted national security, but concerns about severe structural overcapacity still persist.”

Beijing needs to increase significantly investment in green energy by 2030 above the previously forecasted CNY20 trillion needed to meet carbon targets given jumps in projected demand from electricity-intensive AI and green manufacturing. (See MNI INTERVIEW: China AI Needs Green Electricity Investment)

MNI Beijing Bureau | lewis.porylo@marketnews.com

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