“China’s oil products will enter a final growth phase before peaking in the next five years,” Sinopec’s Economics and Development Research Institute (EDRI) said in its annual report, according to Argus news service.
The institute said that the peak for gasoline was forecast for 2025, but for diesel it would come much sooner – in 2021. The institute forecast a fall of 7 % in demand for oil products in 2020.
Chinese refiners will process the same level this year – 13.4 million barrels per day. But capacity is to rise by 2025 to nearly 20 million bpd from the current level of 18 million bpd.
China, the report said, plans an increase of 30 % in exports of oil products by 2025.
The main issue, according to the report, is whether there will be sufficient demand for those oil products. Industry throughout Asia, including China, has run up against excess supply and insufficient demand for oil and oil products – linked to the pandemic and the imposition of severe restrictions.
Experts say China is set to become the world’s largest refiner, overtaking the United States. In 2019, refining capacity in China increased by 1 million bpd and facilities with a total capacity of a further 1.4 million bpd are under construction.
Over the course of 11 months in 2020, despite the effects of the pandemic, China increased its foreign purchases of oil by 9.5 % to 500 million tonnes. And oil production within the country climbed by 1.6 % over 11 months to 180 million tonnes.
According to forecasts by OPEC, China’s economy over the next 25 years will require large amounts of oil, which will still account for up to 19 % of the country’s energy balance.