Sinopec forecasts 600,000 bpd decline in China's oil demand for 2026

Demand Contraction Reshapes Energy Outlook

Sinopec projected a reduction of 600,000 barrels per day in China's oil demand for 2026 compared to 2025. The forecast suggests an 8.9% drop in apparent oil demand, aligning with recent trends of weaker demand in the country. This projection reinforces expectations of reduced crude consumption and lower refinery throughput across China's energy sector.

"Sinopec, one of China's largest oil companies, has projected a significant decline in China's oil demand for 2026, estimating a reduction of 600,000 barrels per day (bpd) compared to the previous year." — Sinopec

The decline reflects broader structural shifts in China's energy consumption patterns. Market observers have noted that China's oil demand may have peaked in the past year, with latest figures indicating continued softening of demand. The timing of this forecast comes as China navigates economic headwinds and transitions toward cleaner energy sources.

Crude Markets Pricing in Uncertainty

Prediction markets are pricing in modest odds for crude oil rallies through year-end. Current pricing for crude reaching a new all-time high by September 30, 2026 stands at 1.4% probability, a slight increase from 1% the previous day. The market for a new all-time high by December 31, 2026 shows a 10.5% probability, reflecting a decline from 14% a week prior.

These low probabilities suggest traders are discounting major upside surprises in crude prices. Sinopec's demand forecast appears to be reinforcing bearish sentiment in near-term oil markets. Geopolitical developments, particularly in the Middle East, could also impact oil market dynamics, though current pricing reflects skepticism about near-term supply shocks.