China's Oil Demand Projected to Peak by 2030 Amid Rapid EV Adoption and Green Energy Transition

China's Oil Demand Nearing Peak, Driven by Energy Transition

Industry experts forecast that China's oil demand is on track to peak during the country's 15th Five-Year Plan period (2026-2030). This projection signals a structural shift in the world's second-largest economy, largely attributed to the rapid proliferation of electric vehicles (EVs) and the expansion of new energy sources. Some major players, such as state refining giant Sinopec, have even offered a more specific timeline, predicting China's oil consumption to peak by 2027 at no more than 800 million metric tons (16 million barrels per day). The International Energy Agency (IEA) also anticipates China's oil demand will peak in 2027, two years earlier than its previous forecasts.

Electric Vehicles Reshaping Transportation Fuel Consumption

The accelerating adoption of electric vehicles is a primary catalyst for the anticipated decline in oil demand. The rapid penetration of EVs is swiftly substituting gasoline and diesel demand in passenger transport. China's EV fleet is already displacing over 1 million barrels per day in implied oil demand, a figure projected to rise significantly. In 2024 alone, EV adoption reduced gasoline consumption by approximately 430,000 barrels per day, equivalent to 12% of China's total gasoline demand. Fully electric models and plug-in hybrids accounted for more than 50% of total new vehicle sales in China in July and August, demonstrating the rapid market shift. This trend has led to a decline in China's fuel demand in 2024, reversing decades of growth.

Expansion of New Energy Sources and Policy Support

Beyond electric vehicles, China's substantial investment in new energy sources is playing a crucial role in its energy transition. The country is the world's top electricity producer from renewable energy sources, with its renewable capacity growing faster than its fossil fuel and nuclear power capacity. In 2024, China installed over 373 GW of renewables, bringing its total installed renewable capacity to 1,878 GW by year-end. Wind and solar power together generated 26% of China's electricity in April 2025, marking a new record. The nation's 15th Five-Year Plan (2026-2030) emphasizes green development and aims to increase non-fossil fuels to around 25% of primary energy consumption by 2030, alongside expanding wind and solar installed capacity to more than 1,200 gigawatts.

Shifting Landscape of Oil Consumption

While transportation fuel demand is set to decline, the role of oil in other sectors is evolving. Forecasts from the CNPC Economics and Technology Research Institute indicate that oil demand for chemical use could peak at 290 million tons by 2050, highlighting a shift from primarily serving transportation to becoming a key input for the chemical industry and new materials manufacturing. This reorientation suggests that while overall oil demand will peak, certain industrial applications will continue to rely on petroleum products for decades to come.