Sinopec Research Arm Sees China Oil Demand Falling 600,000 Barrels a Day in 2026

China's average daily crude oil demand is estimated to fall by about 600,000 barrels in 2026, according to estimates by the company's research arm. High oil prices weighing on demand and faster electric-vehicle adoption are the main drivers of the decline. China is the world's largest crude oil importer.

By product, estimates from the Sinopec Economics and Development Research Institute show gasoline demand falling 8.7% in 2026 and diesel consumption falling 11.4%.

In its first-half 2026 results release, China Petroleum & Chemical Corporation said domestic refined fuel consumption fell 8.6% year on year, weighed down by high oil prices and accelerated substitution by new energy. Gasoline fell 7.9%, diesel fell 11.5%, and jet fuel rose 1.3%, supported by holiday travel and the recovery of international routes. The company's domestic fuel sales were at their lowest level in nearly a decade and have dragged on its earnings for two consecutive years.

High oil prices during the 2026 Iran war accelerated a structural shift toward electric vehicles, eroding demand for road transport fuels. Even without disruption to Middle East crude supply, high oil prices are also undermining some demand and driving electric-vehicle adoption that had already been growing in recent years, thereby reducing total oil demand.

Sinopec is seeking to transform its business and plans to allocate more capital to new energy and chemicals before the end of this decade to raise revenue and profit.