China's Electric Vehicle Boom Weaksens Oil Chokepoints

China's massive electric vehicle boom has a significant impact on the global oil market. The country is the world's largest crude importer, and its reliance on imported oil has made it vulnerable to supply disruptions. However, China has been quietly building up strategic reserves, diversifying suppliers, and suppressing refinery runs, which has helped cushion the blow of recent supply shocks.

What's more, China's rapid electrification of its transport system is removing a significant amount of potential oil demand. In the first half of 2026, electric vehicles displaced an estimated 34 million tonnes of oil, equivalent to around 1.35 million barrels per day. This is not only a significant reduction in oil demand but also a permanent change in the balance of China's energy landscape.

The IEA expects EVs to remove more than 4 million barrels per day of Chinese oil demand by 2035 under both its current- and stated-policy scenarios. At that scale, electrification would offset more than a quarter of the crude volumes that passed through Hormuz in 2025.