Market Speaks: OPEC says China?s oil product demand to average 17 million barrels per day in 2026

OPEC stated in a latest monthly update that in China, infrastructure-related fiscal spending is anticipated to remain stable, supported by fiscal stimulus. Beyond infrastructure spending, the Chinese government has also been very active in financing routine expenditures, including education, healthcare and public-sector wages. These measures are expected to support household consumption indirectly by easing pressure on disposable household income in the near term. A report showed that road traffic in major cities of China rose by 5.2% points in the week to 27 August. All of these point to robust product demand going forward. With ongoing healthy petrochemical feedstock requirements and demand for transportation fuels expected to offer support, strong IP is expected to further back diesel demand in the country.

In terms of specific oil product demand, naphtha is projected to lead by 160 tb/d, y-o-y, in 2025 and NGLs/LPG is expected to grow by 40 tb/d, y-o-y. The increase in demand is on the back of an expected surge in petrochemical activity. Jet/kerosene is expected to grow by around 70 tb/d, y-o-y. However, gasoil/diesel is expected to decline by 40 tb/d, y-o-y and gasoline is projected to decrease by around 10 tb/d, y-o-y. In 2026, economic activity in China is expected to remain robust, though with a slight deceleration from 2025. Fiscal stimulus and infrastructure spending are expected to continue to be supportive. Accordingly, consumption is predicted to be boosted by higher incomes and increased social spending amid low inflation. Consequently, oil product demand is projected to grow by 197 tb/d, y-o-y. Thus, oil demand in China is forecast to average 17 mb/d in 2026.

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