Chinese refiners face moment of truth

Changing oil demand patterns mean different downstream economics amid switch to naphtha, LPG and other petrochemicals

China welcomed the Year of the Snake in late January, ushering in a zodiac animal that, through the shedding of old skin, symbolises renewal or reinvention. The metaphor can be extended to the country’s vast oil refining sector, which will need to undergo its own transformation in coming years as Chinese crude demand nears a peak. China’s top-two NOCs have in recent weeks signalled that the world’s biggest oil importer is nearing peak consumption sooner than expected as gasoline and diesel consumption continue to wane. Oil demand could peak as early as this year, at c.770mt, according to a forecast in February from CNPC’s Economics and Technology Research Institute, a thinktank under China’s