- China’s fuel demand dropped by 2.5% in 2024, signalling an economic shift toward services, technology, and renewable energy.
- Electric vehicles now make up 50% of new car sales, reducing oil demand, alongside expanded high-speed rail networks.
- Petrochemical demand grew by 5% but couldn’t offset the overall decline in gasoline, diesel, and jet fuel consumption.
China’s fuel demand dropped in 2024, ending a decade of steady growth. Gasoline, diesel, and jet fuel consumption fell by 2.5% from 2021 to 8.1 million daily barrels. This figure remains higher than in 2019 but drops well below 2021 levels, signalling a significant economic shift.
China’s transition from manufacturing to services, technology, and renewable energy drives this reduction. The steady rise in fuel demand now appears to belong to the past, with no significant growth in oil consumption expected soon.
Restructuring within China’s industrial sector contributed to the decline. The economy continues to shift toward services, reducing reliance on fossil fuels. The ongoing recession in the construction sector, once heavily reliant on diesel, deepened this trend. China’s GDP grew by only 5% in 2024, falling short of expectations and far below pre-pandemic levels.
Projections indicate that fuel demand will continue to decline as China pursues environmental goals. The country aims to peak CO2 emissions by 2030 and reach carbon neutrality by 2060. Electric vehicles (EVs) now account for 50% of new car sales and significantly reduce fuel consumption. EV adoption in 2024 reduced fuel use by 3.5%, while the shift to natural gas for road transport also cut oil demand.
China’s energy transition gains momentum through public investments in transportation infrastructure. The high-speed rail (HSR) network, already the largest globally, continues to grow, helping reduce dependence on oil-based fuels by 2030.
Despite the drop in fuel demand, oil consumption for petrochemical products rose by nearly 5% in 2024. Plastics and fibers, which use these petrochemicals, show less impact from the energy transition. However, this increase remains small compared to the overall decline in fuel demand.
China’s shrinking oil demand contrasts with rising consumption in emerging markets like India and Brazil. In developed countries, fuel use remains much higher. For instance, OECD countries used four times more fuel than China in 2024.
China’s fuel demand trajectory raises questions about global oil demand forecasts. South Korea’s experience, where fuel demand levelled off in the mid-1990s despite robust economic growth, could serve as a model for understanding China’s future path.
In summary, China’s oil demand entered a period of decline in 2024, driven by a shift in the economy and environmental priorities. The rise of electric vehicles, infrastructure investments, and the downturn in construction have all played key roles in reshaping the country’s fuel consumption. China’s path forward suggests slower growth in oil demand compared to previous years.