Green development to accelerate drop in refined oil demand

China's refined oil demand decline is expected to accelerate in 2025 driven by stricter green development requirements, according to a new report.

The report on China's oil, gas and new energy market development report, released by Petrochina Planning & Engineering Institute (CPPEI), a subsidiary under the China National Petroleum Corporation, predicts that the wider drop in refined fuel demand in 2025, coupled with further increases in domestic refining capacity, will lead to greater standardization of market order and potentially faster exit of outdated capacity.

The report noted that China's overall oil consumption dropped year-on-year in 2024, shifting from previous growth, as demand for refined oil products peaked and began to fall.

Last year, domestic refining capacity remained largely stable, output fell, and exports returned to a downward trend, with domestic prices falling more sharply than international crude, the report said.

Over the next five years, total refined oil consumption is projected to continue its downward trend.

In petrochemicals, the report indicated that market demand is expected to maintain moderate expansion. However, over the next five years, while both supply and demand are forecast to increase, capacity growth is projected to outpace demand growth.

The natural gas market, which previously saw rapid growth and abundant supply, is expected to shift to medium-to-high speed growth with overall supply and demand remaining balanced over the next five years, it said.

The report highlighted natural gas' role in supporting multi-energy integration, optimizing energy supply, innovating energy use, and improving overall energy efficiency.

New energy sources are expected to maintain rapid development in 2025 and over the next five years, the report added.