Sales of electric vehicles in China are growing rapidly. So much so that they are already slowing global oil demand.
Oil consumption in China is slowing. This is a fact that experts such as the International Energy Agency reflect on, and it is evident in the decline in fuel refining. The reasons pointing to this change are varied, but sales of electrified vehicles are without a doubt one of the most important.
tool. Growth in oil demand has historically been linked to growth in a country’s GDP. Traditionally, if the economy was doing well, oil consumption would increase because more cars were sold, more travel was taken, or more investment was made in infrastructure such as housing.
This trend has weakened over the years, although it is still a good scale to take into account. In 2002, there was already talk that the importance of services in the global economy makes this comparative tool less effective, but in general it does not fail: a slowdown in the economy is followed by a decrease in oil demand. And vice versa.
China. Data suggests that China’s oil consumption will slow down markedly this year 2024. Global demand is growing at a very slow pace, but in China specifically it has cooled noticeably. The International Energy Agency (IEA) reports this. Its impact on the global market has been key: it has accounted for more than 60% of global oil growth since the 1970s.
Year after year, China consumes more and more oil, but stagnation is expected in 2024. The IEA forecasts growth of 1.1% (equivalent to 180,000 barrels of oil per day). The US Energy Information Administration (EIA) also thinks so, which in its latest report talks about very similar figures.
These data are accompanied by data Reuterswho note that diesel fuel refining in the country has also declined significantly in recent months. They explain that the slowdown in logistics and transportation has led to a drop of up to 13% at some of the country’s refineries compared to last year.
Because? Analysts from both agencies agree that behind this drop in oil consumption, which was very close to 10% in 2023, is a slowing Chinese economy. One factor is the decline in construction in China, as well as declining investment in the country.
But both the IEA (International Agency) and the EIA (USA) talk about the clear impact that the sale of electric vehicles and plug-in hybrids has on the country. The US notes that in 2025, oil consumption in China will increase by about 300,000 barrels per day, but this will happen mainly due to the petrochemical industry, not to mention transportation.
At the same time, the IEA says sales of electric vehicles and increased commitment to high-speed rail will reduce global oil demand by 400,000 barrels per day this year. This figure is worth taking into account because for the first time, more than half of the cars sold in China are electric or plug-in hybrids – a combination that is defined as “new energy” in China.
Deviation. This loss of correlation between economic growth and oil demand could worsen in China in the coming years. For now, the country’s GDP growth prospects in 2025 are lower (just over 4%, down from 6.7% growth before the Covid-19 pandemic), but oil demand looks set to rise more sharply.
Connected cars are being sold at record rates across the country. In October, 1.43 million cars of this type were sold (including exports), according to CNEVPost. This figure broke the record set in September, when a new milestone was also set, and was 49.6% higher than the figure recorded in October 2024. To give us a better idea, Spain has almost reached one million units sold… for the whole of 2023.
Lace. The high-speed train puts it on. It is a medium that the state has prioritized in recent years, both for the sheer interest of connecting the country and as a means of showcasing its latest technology, and continues to gain followers in a country where distances are vast.
This is a means of transport, they note in Global Timesis helping the state reduce its dependence on oil through greener transport, which with its latest developments has reduced maintenance costs by 15% with lighter and more modern trains.
An improved and faster transport network has led to an increase in the number of travellers, which in the summer of 2024 grew by 6.2% compared to 2023 and carried 872 million travelers on trains. Plans call for another 15,000 kilometers of high-speed rail to be built before the end of the decade.
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