Sinopec Declares Chinese Oil Demand Has Peaked as Beijing Locks In 70% EV Sales Target
China's top refiner says domestic oil demand very likely peaked in 2025, as triple-digit crude prices and Beijing's 2030 EV target accelerate the shift.
China is targeting 70% of all passenger car sales as electric or hybrid by 2030, a goal that analysts say the current fuel price shock may deliver ahead of schedule as buyers accelerate the switch away from petrol, oilprice.com reported on September 11 (2026-09-11). ICE Brent front-month was priced at $103.37 per barrel as of September 19 (2026-09-19), well above the $85.08 average that analysts surveyed by Reuters had forecast for all of 2026.6,4
The structural framing around that target hardened in late August. Sinopec's head said on August 24 (2026-08-24) that Chinese oil demand had "very likely" peaked in 2025, earlier than the company's own previous estimates. Clean energy development, electrification and low-carbon targets drove the assessment.2
The IEA had already put numbers to the shift. Electric vehicles displaced approximately one million barrels per day of Chinese oil demand in 2025, the agency found, with electric trucks already making a meaningful contribution.5 That figure precedes the full acceleration expected from the 70% target and Beijing's stated willingness to reach it sooner.
Fuel sales at China's largest retailer confirm the direction. Sinopec reported gasoline sales fell 8% year over year in April while diesel dropped 6%, Reuters reported.1 Goldman Sachs put the aggregate picture more starkly, estimating gasoline and related product consumption may have fallen by as much as 20%.1
The compression shows up in import volumes too. China's crude purchases fell to a near decade-low in June, and July imports were 24.3% lower than a year earlier, according to analysts surveyed by Reuters.4 Goldman Sachs attributed part of the import decline to structural substitution: China's coal-based petrochemical industry can replace feedstocks that would otherwise require crude oil, reducing import requirements beyond what EVs alone explain.5
China is managing import timing with unusual flexibility. Reuters previously estimated the country held around 1.4 billion barrels in above-ground crude reserves, providing considerable room to draw down stocks rather than buy at spot.3 Chinese refinery operations are running approximately 2.3 million barrels per day below potential capacity, analysis shows.3 Those two buffers together mean Beijing can cut import volumes sharply while sustaining domestic consumption, insulating the supply chain from short-term disruptions.
Supply routing has changed as well. Sinopec disclosed it had received 11 oil tankers previously held up in the Persian Gulf, carrying a combined 2.76 million tonnes of crude.2 Chinese buyers had also ramped up Russian crude purchases as Iranian supplies tightened and Hormuz transit concerns persisted, traders told Reuters. Russia shipped more than 10 million barrels to China via the Arctic's Northern Sea Route in 2026, Reuters reported in the week ending August 31 (2026-08-31).5
The IEA and OPEC remain sharply divided on where the global market goes from here. The IEA projects world oil demand will fall 1.6 million barrels per day in 2026. OPEC forecasts growth of 580,000 barrels per day, though that figure is already 200,000 barrels per day below OPEC's earlier projection. Analysts surveyed by Reuters put demand contraction at between one million and 1.6 million barrels per day for 2026, broadly in line with the IEA view.4
Prices have held above $100 despite the demand deterioration because Middle East supply disruption is keeping the global market in deficit. Reuters surveys expect that shortfall to persist through 2026, with deficit estimates ranging from 1.65 million to 3.5 million barrels per day.4 China's natural gas demand also fell 4% year over year from March through June, with LNG imports down 12% over the same period according to the IEA, adding to evidence of broad energy consumption restraint.5
Sinopec's peak-demand call will age well or poorly depending on how quickly the 70% EV target reaches the commercial vehicle fleet, where diesel demand is stickier than in passenger cars. The Persian Gulf tanker backlog clearing is a short-term supply relief; whether Beijing accelerates EV penetration in heavy haulage is the longer-running pressure on the crude demand outlook.2,6