Sinopec Executive: Chinese Oil Demand Likely Peaked Last Year

A senior executive at China's largest refiner, Sinopec (600028 CH), has stated that it is 'very likely' that Chinese oil demand peaked last year. This commentary comes from an operational executive, not a research unit, giving weight to the statement.

According to the source, peak China demand commentary from the state refining sector is not new, with Sinopec and CNPC research arms having flagged a plateau in transport fuel demand for some time due to electric vehicle penetration, LNG-fuelled trucking, and a structural slowdown in construction-linked diesel use.

The distinction between crude import demand and refined product demand is crucial. Crude import demand can still be supported by petrochemical feedstock needs and strategic stockbuilding, but refined product demand has already plateaued, as seen in refinery runs and product export quotas.