PetroChina sees China oil demand falling from 2026

PetroChina’s (0857.HK) Planning and Engineering Institute projects that China’s total oil consumption will fall to 753 million tons in 2026. This represents a 4.9% decline from 2025, marking a shift from previous growth in oil use. The report characterizes China’s oil demand as plateauing and forecasts that it could fall to around 700 million tons by 2030.

The report links the expected decline to a domestic pivot toward new energy as well as elevated oil prices associated with the Iran war. These factors are seen weighing on oil consumption even as broader energy needs continue to grow.

Refined oil consumption is forecast at 324 million tons in 2026, down 6.4% from 346 million tons in 2025. This indicates a faster contraction in refined products demand than in total oil use. The report notes that this follows a previously recorded 3.5% drop in refined oil consumption.

Despite the weakening demand outlook, China’s oil refining capacity is expected to keep expanding. Total refining capacity is projected to reach 963 million tons per year in 2026, an increase of 15 million tons. This creates a situation in which processing capacity continues to grow even as domestic consumption slows.

Within refined products, jet fuel stands out as an exception to the broader decline. Jet fuel consumption is expected to grow by 0.2% in 2026, contrasting with the contraction in overall refined oil demand.

On the supply side, China’s crude oil production is forecast at 217 million tons in 2026. This represents a 0.5% year-on-year increase, indicating modest growth in domestic output despite the weaker demand outlook. The combination of slightly higher production and falling demand could influence import requirements and refinery utilization.

Natural gas is projected to play a growing role in China’s energy mix over the same period. Gas consumption is forecast to rise by 1.3%–2.5% year on year in 2026, reaching 440–445 billion cubic metres, up from 434.3 billion cubic metres in 2025. Looking further ahead, gas demand is projected in a range of 530–550 billion cubic metres by 2030.

These projections highlight a divergence between oil and gas trajectories. While oil demand is expected to plateau and gradually decline, natural gas use is seen expanding, consistent with a broader transition toward alternative and lower-emission energy sources cited in the report.