Sinopec forecasts China's petroleum consumption to peak by 2027
BEIJING, Dec 19 (Reuters) - Sinopec said on Thursday it expects China's petroleum consumption to peak by 2027 as diesel and gasoline demand weakens, while noting that the incoming Trump administration represented a major question mark for China's energy industry.
The 2027 peak will be no more than 800 million metric tons or 16 million barrels per day, the state energy giant said. This is a clearer forecast than last year, when Sinopec put the peak at around 800 million tons between 2026 and 2030.
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That would be up from the 750 million tons consumed in 2024. This year's level was down about 10 million tons from last year and was the second annual decline in two decades, according to the company's outlook.
Donald Trump's second term in office is key to watch for 2025, said Wang Pei, deputy general manager of the Sinopec Economics and Development Research Institute, adding that the biggest uncertainty for the market is how potential changes to the U.S. sanctions regime could affect Iran's 1.5 million barrels per day of oil exports.
China is Iran's biggest buyer of oil, with most going to independent refineries.
Changes to environmental policies, as well as trade and technology barriers, will affect China's economy and energy transition, she said, pointing to the significant impact of the last trade war.
But Trump could also reduce tensions in Ukraine and the Middle East, removing some risk premium from markets, Wang added.
Sinopec said broader use of LNG and electric vehicles would reduce demand for gasoline and diesel and that the petrochemical sector will ultimately consume more oil than the transport sector.
Diesel demand is expected to fall 5.5% year on year to 174 million tons, as LNG-fuelled trucks accounted for 22% of truck sales in the first three quarters of 2024.
Gasoline demand is set to decline 2.4% to 173 million tons in 2025. Electric vehicles will displace about 26 million tons or 15% of gasoline consumption.
Of the three key refined products, only aviation fuel use is expected to grow, by 7% on the year to 45.5 million tons.
The petrochemical sector is set to account for 55% of oil consumption in 2060, up from 22% in 2024, Sinopec said.
China's crude oil output is expected to reach 215 million tons in 2025, with oil refining capacity at between 960 million and 970 million tons per annum.
Crude oil output for January to November this year was 194.92 million tons, up 1.9% from a year earlier, according to government data.
Sinopec also said China's natural gas consumption may peak earlier but at a higher level than it forecast last year.
By 2030, China's natural gas consumption is expected to reach 570 billion cubic metres (bcm) and plateau at around 620 bcm between 2035 and 2040. In last year's forecast, Sinopec said China's natural gas consumption would plateau at 610 bcm by around 2040.
Natural gas consumption is forecast at 458 bcm in 2025, up 6.6% year on year, Sinopec added.
It also expects China's carbon emissions from energy-related activities to now peak at a higher level.
Energy-related carbon emissions are expected to peak before 2030 at between 10.8 billion and 11.12 billion tons. By comparison, last year's forecast was for a peak at around 10.1 billion tons between 2026 and 2030.
(Reporting by Colleen Howe, Ella Cao, Florence Tan, Siyi Liu; Editing by Himani Sarkar and Nicholas Yong)