Sinopec's China demand forecasts suggest the import slump extends beyond the Iran war
The state refiner projects gasoline down 8.7% and diesel down 11.4%, deeper than Rystad Energy and framed explicitly as a structural shift.
Sinopec's Economics & Development Research Institute projects Chinese gasoline demand will fall 8.7% and diesel consumption will drop 11.4%, numbers that sit materially above the most bearish external analyst forecasts and reflect the company's own judgment that China's oil demand has structurally peaked.4
ICE Brent crude front-month was at $104.73 per barrel on Friday (2026-09-11), with ULSD heating oil front-month at $5.01 per gallon and RBOB gasoline front-month at $3.35. Markets have priced the Iran supply shock heavily. China's import data tells a different story: shipments fell to 40% of pre-Iran war levels in June (2026-06-01), according to The Hindu BusinessLine, and the country has averaged just 8 million barrels per day since April (2026-04-01) — down from a five-year average of 11.5 million bpd.2
Rystad Energy, already having sharply revised its China outlook, expects gasoline and diesel use to fall 6.6% and 6.9% respectively, upgraded from pre-war forecasts of 3.5% and 3%, according to The Hindu BusinessLine. Sinopec's gasoline forecast of 8.7% is roughly 2 percentage points more pessimistic than Rystad's already-downgraded number. On diesel, the divergence is wider: Sinopec at 11.4% against Rystad's 6.9%. When the country's dominant refiner publishes forecasts that exceed the most bearish independent houses, it usually signals proprietary demand intelligence rather than institutional caution.2,4
Sinopec's group chief told Rigzone in August (2026-08-24) that China's oil demand had "very likely" peaked in 2025, earlier than the company's own previous estimates, driven by clean energy development and electrification goals. That is a structural call, not a near-term price response.4
Electric and hybrid vehicles reached a record 62% of new car sales in China in June (2026-06-01), even as 87% of the total car fleet remained petrol-powered, according to The Hindu BusinessLine. The fleet share matters more than the sales share for near-term fuel demand, but the transition is compounding: each year the ratio shifts further, gasoline demand shrinks independently of Strait of Hormuz conditions.2
Diesel faces a distinct additional pressure. In June (2026-06-01), Beijing launched a plan to electrify trucking, targeting 80% electrification on busy short-haul routes by 2030, The Hindu BusinessLine reported. Rystad analyst Ye Lin said "the crisis has acted as a trigger," accelerating a policy shift already under way before the Iran conflict.2 Trucking electrification policy of that scale does not expire with any ceasefire.
China's power sector adds corroborating context. Solar generation rose 40% in 2025 and wind increased 13%, while coal consumption flatlined for the first year in a decade, Asian Power reported.1 Coal and oil are different markets, but both data points confirm the same directional shift: China's energy economy is structurally reducing its reliance on imported hydrocarbons across multiple sectors simultaneously.
The supply picture is not benign. U.S. Treasury Secretary Scott Bessent announced unprecedented Iran sanctions on Monday (2026-08-24), Blockonomi reported, and Hormuz shipping risks remain active.3 Dubai crude stood at $109.75 per barrel on Friday (2026-09-11), a $5 premium to ICE Brent front-month, reflecting real Middle East supply tightness. Some analysts expect Chinese imports to settle 1 million to 2 million bpd below pre-conflict levels even after the war ends, The Hindu BusinessLine reported.2
The clearest test for Sinopec's structural thesis will come in Q4 2026 (October through December) Chinese diesel import data. If shipments fail to recover after any de-escalation in the Middle East, it would validate the 11.4% decline forecast and shift the market debate from the timing of China's demand recovery to whether that recovery arrives at all.4,2