Nation to hit oil demand peak by 2030

China, long the single biggest driver of global oil demand growth, is on track to hit its consumption peak during the country's 15th Five-Year Plan period (2026-30), driven by the rapid proliferation of electric vehicles and new energy sources, industry experts said.

The forecast, released by the China National Petroleum Corp Economics and Technology Research Institute, signals a structural shift in the world's second-largest economy, even as the global outlook for oil demand proves more resilient than expected.

China's accelerating energy transition is ushering its oil and gas sector into a new phase of development, it said.

As the long-time engine of demand growth, China reaching its peak signifies the fundamental success of its massive push for energy transition and domestic decarbonization, said Dai Jiaquan, chief economist at the institute.

Wu Mouyuan, vice-president of the institute, attributed the global resilience to sustained growth in oil consumption in emerging economies and steady demand for chemical feedstocks and aviation fuels.

The rapid penetration of EVs is among the most important factors driving the oil peak forward, with a swift substitution of gasoline and diesel demand in passenger transport, he said.

In the road transport sector, particularly for light-duty vehicles, the shift to new energy vehicles is compressing the market for traditional fuels faster than originally modeled.

While China's peak consumption looms, the overall global picture suggests higher and later demand. The report raised its forecast for global oil demand to peak at around 4.8 billion metric tons, a 5.2 percent increase from its 2024 prediction.

Crucially, the peak timing has been pushed back by a decade to 2040, it said.

However, the domestic landscape for China is changing fast. The report predicts that China's total primary energy demand will peak at around 2035 at 5.0 billion tons of standard oil. By 2060, while oil and gas will remain significant, the nation's energy mix will be radically diversified.

On the other hand, the Chinese oil market is shifting from primarily serving transportation fuel to becoming a key input for the chemical industry and new materials manufacturing.

The report forecasts that oil demand for chemical use will peak at 290 million tons by 2050.

Natural gas is expected to play a critical role in supplementing the phase-out of coal and supporting the new power system. Its consumption is projected to enter a plateau between 2035 and 2040, with demand ranging from 620 to 650 billion cubic meters.

Meanwhile, the rise of artificial intelligence and new high-energy-demand sectors will significantly boost power requirements. China's electricity demand is expected to double its 2025 level by 2060, surpassing 20 trillion kilowatt-hours, with the terminal electrification rate hitting 62 percent.