China's biggest oil refiner now believes the country's oil demand likely reached its peak in 2025 — years earlier than most analysts had forecast. Sinopec Chairman Hou Qijun made the assessment at an earnings briefing in Hong Kong, attributing the peak to clean energy, electrification and low-carbon targets.
The declaration carries weight beyond any single company's outlook. Sinopec — formally China Petroleum and Chemical Corporation, headquartered in Beijing — is the world's largest oil refining conglomerate and the sixth-highest revenue company globally. Its read on domestic demand is, in effect, a structural verdict on the world's single largest growth engine for oil consumption over the past two decades.
When its chairman speaks at a formal earnings briefing, he speaks for an institution whose supply decisions and demand forecasts move global crude markets.
Sinopec faces a supply squeeze on crude inputs. The company said it would not buy Iranian oil and that it was actively seeking government support to tap China's strategic petroleum reserves. Beijing had already rejected a request to release 13 million tons from those reserves. Executive Zhao said the company believed the government was closely watching crude and refined fuel inventories and would act at the appropriate time to support refinery operations.
Sinopec's history explains why a demand-peak call from its chairman carries particular authority. The company was carved from China's Ministry of Petroleum Industry and Ministry of Chemical Industry assets, which were partly privatized in the 1980s. Sinopec Limited was established as a joint-stock entity in February 2000 and listed in Hong Kong, New York and London in October that year, raising 3.5 billion dollars in its IPO. A Shanghai listing followed in June 2001.
Analysts have long categorized Sinopec as more of a downstream player than peer PetroChina, given the legacy asset base inherited from its founding entities. That exposure means the company's refineries feel a demand slowdown before upstream producers do — making the chairman's peak-demand call a front-line observation, not a theoretical projection.
Starting in 1998, Sinopec expanded into production through a state-mandated asset swap with China National Petroleum Corporation, trading some of its refineries in exchange for upstream assets. The restructuring gave Sinopec a fuller position across the oil value chain.
On the chemicals side, Sinopec's partnership history reflects how the company has managed international relationships. In 2005, it joined BP to build SECCO, an ethylene derivatives plant in the Shanghai Chemical Industry Park, with an initial investment of 2.7 billion dollars. The facility produces more than 3.2 million tonnes of petrochemical products annually. In 2017, Sinopec bought out BP's remaining stake through its Gaoqiao subsidiary for 1.68 billion dollars. In 2022, British chemicals group Ineos acquired half of Sinopec's share of SECCO as part of a broader partnership agreement.
The peak-demand call, if accurate, has concrete consequences for refinery utilization, investment planning and crude import contracts — all of which Sinopec manages at a scale no other refiner in the world matches.
