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Despite a peak in demand from its transport sector, China is expected to stay central to global oil demand trends, according to Vitol. The key factor behind this continued importance is the petrochemical industry, said Giovanni Serio, Vitol’s head of research.
Serio, speaking at the FT Asia Commodity Summit, highlighted that growth in petrochemicals alone could soon meet the global demand for plastics, indicating it as a major force driving China’s oil demand. “This segment is less impacted by decarbonization efforts, making it a core driver of oil demand both in China and worldwide,” he noted.
The International Energy Agency reported earlier this year that up to 90% of China’s oil demand growth between 2021 and 2024 stemmed from the petrochemical sector. In contrast, demand for transport fuels has been slowing as electric vehicle adoption accelerates in the world’s largest EV market.
However, Vitol’s Serio pointed out that China’s gasoline demand is still seeing growth, adding around 22,000 barrels per day (bpd) this year—a modest increase compared to the 268,000 bpd growth seen in 2023.
For diesel, LNG trucks are gradually reducing demand, though price differentials remain influential. As LNG prices fluctuate with global demand, particularly during peak winter months, sales of LNG trucks in China have already dropped in September due to a price increase against diesel.
Over the medium term, Serio concluded that petrochemicals will continue to be the dominant driver behind global oil demand growth.
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