China's Diesel Demand Drops 11%
OIL & GAS

China's Diesel Demand Drops 11%

China's diesel demand fell by 11% year over year in June, reaching 3.9 million barrels per day, marking the largest percentage drop since July 2021, according to the U.S. Energy Information Administration (EIA). This decline has had a significant impact on global oil markets, which had anticipated continued growth from the world's second-largest economy.

The Organization of Petroleum Exporting Countries (OPEC) recently lowered its 2024 oil demand forecast, citing softer expectations for China?this being the first reduction since the outlook was published over a year ago. Similarly, the Paris-based International Energy Agency (IEA) cut its 2025 forecast, also pointing to a weakening Chinese economy.

Diesel consumption in China had reached an all-time high last year, but demand has sharply declined since the second quarter of this year. The EIA attributes this slump to two primary factors: the country's struggling property sector, which has slowed economic growth, and the increasing use of liquefied natural gas (LNG) in heavy-duty trucks as a substitute for diesel.

"Apart from reduced diesel use due to slowing economic activity in the construction and property sectors, a small but growing share of China's trucking fleet is using LNG instead of diesel," the EIA reported.

Sales of LNG-powered trucks in China soared by 307% last year, reaching 152,000 units, according to data from Chinese information provider CV World. Consultancy FGE estimates that LNG will displace 110,000 to 120,000 barrels per day of diesel demand in China this year and the next.

Amid these shifts, Chinese refineries have faced challenges, with oil refinery output in July falling by 6.1% from a year ago, marking the fourth consecutive month of decline.

This downturn in diesel demand and refinery output underscores the broader economic challenges facing China and the shifting dynamics in the global energy market.

China's diesel demand fell by 11% year over year in June, reaching 3.9 million barrels per day, marking the largest percentage drop since July 2021, according to the U.S. Energy Information Administration (EIA). This decline has had a significant impact on global oil markets, which had anticipated continued growth from the world's second-largest economy. The Organization of Petroleum Exporting Countries (OPEC) recently lowered its 2024 oil demand forecast, citing softer expectations for China?this being the first reduction since the outlook was published over a year ago. Similarly, the Paris-based International Energy Agency (IEA) cut its 2025 forecast, also pointing to a weakening Chinese economy. Diesel consumption in China had reached an all-time high last year, but demand has sharply declined since the second quarter of this year. The EIA attributes this slump to two primary factors: the country's struggling property sector, which has slowed economic growth, and the increasing use of liquefied natural gas (LNG) in heavy-duty trucks as a substitute for diesel. Apart from reduced diesel use due to slowing economic activity in the construction and property sectors, a small but growing share of China's trucking fleet is using LNG instead of diesel, the EIA reported. Sales of LNG-powered trucks in China soared by 307% last year, reaching 152,000 units, according to data from Chinese information provider CV World. Consultancy FGE estimates that LNG will displace 110,000 to 120,000 barrels per day of diesel demand in China this year and the next. Amid these shifts, Chinese refineries have faced challenges, with oil refinery output in July falling by 6.1% from a year ago, marking the fourth consecutive month of decline. This downturn in diesel demand and refinery output underscores the broader economic challenges facing China and the shifting dynamics in the global energy market.

Next Story
Infrastructure Transport

L&T-Alstom Partnership to Upgrade Mumbai Metro Line 4

Larsen & Toubro (L&T), in partnership with Alstom Transport, has secured a contract to supply essential systems for Mumbai Metro's 35.2 km Line-4 and Line-4A (Green Line), which will connect Wadala, Kasarvadavali, and Gaimukh. Identified as Package CA-234, the contract includes the supply of 39 six-coach trains, totalling 234 coaches, along with Communication-Based Train Control (CBTC) signalling and train control systems, telecommunications infrastructure, platform screen doors, and depot machinery for the Mogharpada Depot. This project comes after Alstom's previous withdrawal from a similar ..

Next Story
Infrastructure Energy

Jio-bp to Expand Retail Network and EV Charging Infrastructure

Jio-bp, a joint venture between Reliance Industries and global energy major bp, is focused on expanding its retail infrastructure and enhancing customer experience to strengthen its presence in the downstream energy market. The company plans to establish 100,000 electric vehicle (EV) charging stations over the next 10-12 years, aligning with the Indian government's efforts to boost EV charging infrastructure and achieve net zero targets. Additionally, Jio-bp intends to open 1,000 retail outlets to sell compressed biogas (CBG) produced by Reliance's CBG plants. Jio-bp has introduced 480 kW ..

Next Story
Infrastructure Energy

Kolkata Metro to Install Power Backup System on Underground Stretch

Kolkata Metro Railway is set to install a Battery Energy Storage System (BESS) at the Central Station substation to enhance commuter safety during power outages. This system will ensure uninterrupted operations on the 16 km underground Tollygunge-Dumdum stretch of the Blue Line corridor (Dakshineswar-New Garia), which spans 28 km. The BESS, comprising inverters and advanced chemistry cell (ACC) batteries, will enable trains to operate at 30 km/h during power cuts or grid failures, ensuring that passenger-filled coaches can safely reach the nearest station. This initiative aims to improve both..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?