China’s “Peak Oil”

In the middle of the war escalation between Iran and Israel, a scene attracted all global attention: China ordered his oil tankers Leave the Ormuz Strait, the artery where a fifth of global oil travels. It was a cautious reaction, yes, but revealing. More than 80% of the Iranian crude is destined for Chinese refineries, and yet Beijing opted for diplomatic silence rather than confrontation. The urgent yielded to the strategic.

And maybe there is the true story. Because while moving away from tensions in the Middle East, China is approaching – step to a pace – to an energy milestone that reconfigures the global board: its oil demand is about to reach the peak. Or maybe he has already done it.

From global leader to consumer in pause. For more than two decades, China promoted a good part of the global oil growth. From YOUR INCOME TO THE WTO In 2001, each stretch of highway built, each inaugurated refinery, each expanded city or megaproject launched added pressure on the world’s world demand. According to the Financial TimesChina has been responsible for more than 50 % of the increase in global demand since 2000. Its economic expansion was also an energy expansion.

However, that trajectory begins to be invested. The International Energy Agency estimates that the demand peak It will be reached in 2027while key actors in the sector in China advance it considerably: Sinopec foresee which could happen before 2027 and CNPC claims that it has already surpassed in 2023.

An accelerated paradigm shift. China’s energy turn does not occur in a vacuum. It is part of a much deeper technological, social and economic transformation, which manifests itself at all levels of daily life. Just see how tourist videos have been viralized by paying with the palm of the hand In supermarkets either Metro stations. What until recently seemed science fiction, in China it is already routine.

That same vertiginous rhythm is happening in the energy system. On the one hand, an internal technological revolution: electric vehicles, heavy transport electrification, trucks that work with natural gas and high -speed trains. On the other, a structural change: the real estate crisis has reduced the demand for heavy machinery, construction materials and petrochemicals, sectors historically linked to oil consumption.

The consequence is clear. Crude imports fell in 2024 for the first time in two decades – exchanging the pandemic -, According to Financial Times data. An unequivocal sign that oil is ceasing to be the growth engine that was for more than 20 years.

But there is a production record. Paradoxically, China is producing more oil than ever. In March 2025, it reached a historical maximum: 4.6 million barrels per day, According to Global Times. Besides, He has just completed The drilling of the deepest vertical oil well in Asia, with 10,910 meters deep. Contradiction? Not exactly, since China drills when there is need.

The point is that 72% of the oil it consumes is imported. For Beijing, that dependence is a weakness. Therefore, for years, more than 80,000 million dollars investigate annually to revitalize old deposits. The objective is not to grow without brake, but to guarantee a stable domestic supply. CNOOC has assured in Reuters Having reached a replacement ratio of 167%reserves, which allows to maintain internal production for at least a decade. In other words, less oil to consume, but more own oil to control.

The end of an era. According to Bloomberg analystsis finishing the oil supercycle that defined the markets for more than 20 years. As China decoupled from intensive raw growth, pressure on OPEC, large oil companies and exporting countries – as Saudi Arabia, Iraq or Russia – becomes stronger and louder. Morgan Stanley lo has clearly summarized for the Financial Times: “The world we knew, where oil rose every time China grew, is disappearing.”

To begin: an electro -speaking. China is not only slowing its crude oil consumption, it is building an economy driven by electrons. Since Xi Jinping assumed power in 2013, the country launched a “Energy Revolution” based on electrification, technological innovation and energy sovereignty. Today, 10% of your GDP It is linked To clean industries: electric vehicles, batteries, solar panels, intelligent networks, wind turbines.

Today, the Asian giant is the world’s largest producer of electric cars, and its two great champions —Byd and Catl – reinvote about 5% of their revenues in R&D. Also, like have detailed in Bloomberghas already deployed 40 tension ultraalt transmission lines, which connect the mega west solar plants with the east industrial centers. The country plans to invest another 800,000 million dollars in the next five years to consolidate its electricity network. The goal? Reduce oil dependence without compromising growth.

After the peak. With China outside the center of demand, India and other emerging countries will absorb part of the growth, but without reaching the scale of the Asian giant. According to the IEAthe global oil demand will reach its maximum in 2029, but without China, the market will lose its main engine. “Even if other economies continue to grow, the Chinese decrease marks the beginning of a structural decline in world demand for crude oil,” He explained Ciaran Healy, an IEA analyst.

While their ships turn around in Ormuz, their economy accelerates in another direction. Not towards a price war. But towards a model where power is not measured only by fossil reserves, but by transformation capacity. The oil era does not end, but its dominant role in the world economic model is retreating. The rules of the game are changing.

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