Sinopec Chief Says China Oil Demand Peaked in 2025 as Persian Gulf Tanker Backlog Clears
Sinopec's peak-demand call and a Persian Gulf tanker release combine to reshape the outlook for Chinese crude imports in the second half.
Sinopec's head told investors on Monday (2026-08-24) that China's oil demand "very likely" peaked last year, earlier than the company had previously estimated, citing clean energy development, electrification and low-carbon goals as the drivers pulling consumption lower.7
The statement came alongside second-quarter results showing the Platts Brent spot price averaged $92.6 per barrel in Q2, up 29.1% year on year, yet domestic natural gas demand growth at Sinopec slowed to just 1.6% year on year over the same period. ICE Brent front-month was at $92.38 per barrel as of Tuesday (2026-08-25) in early Asian hours. Higher prices have not arrested the deceleration.6
The retail picture had already been signalling strain. Sinopec's gasoline sales fell 8% year over year in April while diesel sales dropped 6%, Reuters reported. Goldman Sachs has estimated that Chinese consumption of gasoline and related products may have fallen by as much as 20%.2
Crude import volumes reinforced the point. May arrivals plunged 29% to 7.8 million barrels per day — the lowest level in eight years — as Middle East supply disruptions tightened flows into the world's largest crude importer.2
But supply logistics were shifting even as demand softened. Sinopec confirmed on Monday (2026-08-24) that it had received 11 oil tankers previously held up in the Persian Gulf, carrying a combined 2.76 million tons of crude. The arrival of those cargoes eases near-term refinery feedstock pressure that had been building since the Middle East disruption intensified.7
Before those tankers cleared, Sinopec had already begun rerouting. Trade sources and vessel-tracking analysts told reporters the company bought between 30 and 40 shipments — or 241,000 to 320,000 barrels per day — of Russia's Eastern Siberia-Pacific Ocean (ESPO) crude for delivery between July and September.4 Chinese buyers were snapping up August-loading ESPO cargoes from Russia's Kozmino terminal weeks ahead of the usual schedule, Rigzone reported on July 24 (2026-07-24).3
"Chinese oil majors led by Unipec have been snapping up Russian ESPO since July, with the latest disruption in the Middle East accelerating August and September buying," said Emma Li, lead China markets analyst.3
Sinopec processed 113 million tonnes of crude in H1 2026 and posted oil and gas equivalent production of 263.47 million barrels, up 0.3% year on year.6 The company is sustaining throughput even as the retail demand signal weakens, a gap that will likely compress margins in the second half unless fuel consumption stabilises.
High crude prices have meanwhile strengthened the economics of coal-based alternatives. Ningxia Baofeng Energy, China's biggest coal-to-chemicals producer, reported record H1 profits of $1.4 billion, Bloomberg reported on August 12 (2026-08-12). China already derives 85% of its methanol and ammonia from coal, according to IEA data cited by Bloomberg, meaning the substitution infrastructure is mature and the competitive pressure on crude-derived feedstocks at current price levels is not marginal.5
The IMF trimmed its global growth forecast to 3.1% for the year, according to CNOOC's first-quarter report published in early June (2026-06-03), with Middle East geopolitical tensions flagged as an inflation risk. A softer global macro backdrop adds a secondary drag on any recovery in Chinese fuel demand.1
With 11 tankers cleared and Q3 ESPO volumes largely locked in, Sinopec's near-term feedstock position looks manageable. The harder question is whether Q3 retail fuel data — Sinopec's own gasoline and diesel sales figures, due with the third-quarter report — show another year-on-year contraction. If they do, the peak-demand call made on Monday (2026-08-24) starts to look less like a forecast and more like an accounting.7,2