China’s Oil Demand Rises as Crude Storage and Refinery Rates Shift

The demand for crude oil in China has shown signs of recovery, with a significant drop in the amount of oil going into storage. According to Clyde Russell of Reuters, the daily storage rate fell from 1.42 million barrels in June to 530,000 barrels in July 2025. This decline suggests an uptick in consumption, as refinery rates also increased to 14.85 million barrels per day, marking an 8.9% rise compared to July 2024. However, this figure represents a 2% decrease from the previous month.

Refinery utilization rates have improved both year-on-year and month-on-month, reinforcing the perception of enhanced demand for crude oil. Russell notes that China has been actively building its crude oil inventories since March 2025. Although the country does not officially disclose these inventory figures, they have been calculated at approximately 980,000 barrels per day for the first seven months of the year. This inventory accumulation has played a pivotal role in boosting China’s crude oil imports earlier this year.

As the world’s largest consumer of oil, China’s demand dynamics are shifting. The growth in oil imports has sometimes been misinterpreted as a sign of improving demand prospects. In reality, a combination of factors is influencing this trend. The rise of affordable electric vehicles (EVs), supported by generous government subsidies, is altering traditional consumption patterns. Additionally, the introduction of LNG trucks has further decreased oil demand in the country. Some analysts indicate that electric trucks may soon contribute to this reduction in oil consumption, marking a significant change in China’s energy landscape.

Looking ahead, analysts predict that China’s demand growth could peak before 2030. Furthermore, there are expectations that India may soon surpass China as the leading driver of crude oil demand. Several factors contribute to this outlook, including a slowing growth rate for the Chinese economy, a declining population, and a plateau in car ownership within the world’s largest EV market.

The evolving energy landscape in China is not just about a shift in vehicle types; it reflects broader economic and demographic changes that could reshape global oil demand. As both China and India navigate their respective energy futures, understanding these dynamics will be crucial for industry stakeholders and policymakers alike.