China’s oil demand is expected to decline by 600,000 barrels per day, or 8.9%, in 2026, marking a third consecutive annual drop, according to the Sinopec Economics & Development Research Institute.
The forecast, released in China, points to continued weakness in fuel consumption in the world’s largest oil-importing country and could further limit crude imports and weigh on global oil prices.
Gasoline and diesel are expected to lead the decline, with demand forecast to fall 8.7% to 149 million metric tons and 11.4% to 164 million tons, respectively, in 2026.
By contrast, jet fuel demand is expected to increase by 1.3% year on year to 41.55 million tons, supported by continued growth in air travel.
The research institute also expects China’s chemical sector to face weak demand, with ethylene-equivalent consumption forecast to fall 8% for the full year despite a more than 50% rise in chemical industry profits during the first seven months.
China’s crude processing is now forecast at 697 million tons in 2026, down from an earlier estimate, reflecting weaker fuel demand and pressure on refiners.
Sinopec, China’s largest refiner, has set its crude throughput target at 113 million tons for the second half of 2026, broadly unchanged from the first half.
Meanwhile, China’s refining capacity is expected to reach 952 million tons per year, or 19.04 million barrels per day, in 2026.
The research unit said tighter government policies and falling demand would accelerate the closure of inefficient facilities, with smaller refineries accounting for 80 million to 100 million tons of capacity expected to exit the market.
By the end of 2030, China’s annual refining capacity could fall to between 900 million and 910 million tons, as the country reduces excess capacity amid a prolonged decline in oil consumption.