Key facts
- China's oil consumption decreased by 9% year-over-year in the second quarter.
- Electric vehicles accounted for roughly one-third of the reduction in Chinese oil demand in the first half of 2026.
- Alternative-fuel use in China's trucking sector increased by 90% year-over-year in the first six months of the year.
- High crude oil prices, exacerbated by Persian Gulf supply disruptions, prompted China to reduce imports and increase inventory drawdowns.
- Lower oil consumption is estimated to have prevented approximately 35 million tons of carbon dioxide emissions in the second quarter.
China's oil consumption experienced a significant 9% year-over-year decline in the second quarter, a trend accelerated by elevated crude oil prices and a strategic pivot towards electric alternatives. This shift, driven by factors including disruptions in the Persian Gulf, has led to reduced crude imports and increased reliance on existing inventories. The adoption of electric vehicles, trucks, and industrial equipment is displacing substantial volumes of gasoline and diesel, contributing to a 1% decrease in China's overall carbon dioxide emissions during the quarter. This marks the first quarterly emissions reduction primarily attributed to lower oil consumption, even as coal-fired power generation saw a 3% increase in emissions.
Electric vehicles played a crucial role, displacing an estimated 36 million metric tons of oil in the first half of 2026, with EVs alone accounting for 19 million tons in the second quarter, a 50% rise from the previous year. The trucking sector showed particularly rapid change, with alternative-fuel use jumping 90% year-over-year between January and June, significantly cutting diesel consumption. Beyond transportation, electric equipment is also replacing diesel-powered machinery in construction and mining, further diminishing petroleum demand. Slower growth in China's chemical sector also contributed to reduced oil use.
The Centre for Research on Energy and Clean Air (CREA) estimates that lower oil consumption prevented approximately 35 million tons of CO2 emissions in the second quarter, equivalent to about 1.3% of China's total emissions for the period, even accounting for emissions from electricity used to charge EVs. As the world's largest crude importer, China's evolving transportation fleet has implications extending far beyond its domestic emissions targets. CREA anticipates that oil demand may continue to weaken throughout the year, potentially leading to further emissions reductions, especially with subdued property market activity and near-capacity coal-to-chemicals production.