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China Petroleum & Chemical Corporation, or Sinopec, saw its refinery throughput drop by 2.03% in 2024 from a year earlier, the biggest Chinese refiner said on Friday.
Sinopec’s refinery throughput fell to 252.3 million tons last year, amid an overall decline in Chinese crude processing rates, for the first time in decades.
China, the world’s largest crude oil importer, saw lackluster oil demand and crude imports in 2024 amid a weaker-than-expected economy and faltering demand for road transportation fuels.
As a result, Sinopec’s diesel production slumped by 10.27% and light chemical feedstock fell by 5.8%, the company said in an unaudited preview of production for 2024.
Oil and gas production at the Chinese state giant rose by 2.2%, with crude oil output only slightly higher by 0.26% and natural gas production rising by 4.68%.
Sinopec’s lower refinery throughput should not come as a surprise for analysts as China’s total crude throughput dropped last year.
Weaker fuel demand and depressed refining margins in 2024 resulted in the first annual decline in China’s refinery throughput in over 20 years, excluding the pandemic lockdown year of 2022, government data showed earlier this month.
Chinese refiners processed on average 14.13 million barrels per day (bpd) of crude oil last year, down by 1.6% compared to the record 14.7 million bpd processed in 2023 when China emerged from the pandemic lockdowns, per data from China’s National Bureau of Statistics.
China’s consumption growth slowed, due to weaker economic performance and a shift to electric vehicles (EVs) and LNG-fueled trucks.
Although some of the weakness is attributable to weaker economic performance, the shift toward EVs and LNG trucks is removing some road fuel demand permanently, analysts say.
Both Chinese state energy giants CNPC and Sinopec have predicted peak oil demand growth on the horizon, with CNPC forecasting it for this year and Sinopec sees the peak coming in 2027.
