What caused China's oil consumption to fall 9% year-on-year in Q2 2026, and what was the resulting impact on emissions?

China's oil consumption fell 9% year-on-year in the second quarter of 2026 primarily due to a 16% slump in the transport sector, driven by rising fuel prices during the Iran War, which pushed millions of drivers toward electric vehicles and charging stations instead of gas pumps. Crude oil processing dropped 11%, and the shift significantly reduced oil demand—marking the first time oil (rather than coal) was responsible for a drop in China’s total emissions, trimming them by 1%. According to the Centre for Research on Energy and Clean Air (CREA), this decline occurred despite continued growth in coal use at power stations.

Why does CREA say the shift toward EVs in China is unlikely to reverse, and what evidence supports that assessment?

CREA lead analyst Lauri Myllyvirta stated the shift is unlikely to be reversed because the rise in oil prices triggered a stronger and faster transition in China’s transportation sector than anticipated, accelerating EV deployment and usage from an already high base. Supporting evidence includes a one-third increase in the total number of EVs and a 60% surge in charging volumes in Q2 2026—indicating existing EVs were used far more intensively, with plug-in hybrid drivers likely favoring electricity over fuel. Additionally, electric heavy-duty trucks experienced a sales boom due to elevated diesel prices, and the volume of oil displaced by EVs in the first half of 2026 exceeded the UK’s total six-month oil consumption, underscoring the scale and momentum of the trend.

China’s Waning Appetite for Oil Is Keeping Emissions in Check

Sep 2, 2026

China's oil consumption fell 9% year-on-year in Q2 2026 as high fuel prices accelerated electric vehicle adoption, contributing to a 1% reduction in total emissions. Sinopec executives suggest oil demand may have already peaked five years ahead of schedule.

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China’s Waning Appetite for Oil Is Keeping Emissions in Check

China’s Waning Appetite for Oil Is Keeping Emissions in Check

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