“During the 15th Five-Year Plan period, China's oil import dependency will remain at approximately 70%.”

On February 3, the China National Petroleum Corporation Economic and Technical Research Institute (CNPC ERIC) released the “2025 Domestic and International Oil and Gas Industry Development Report” (hereinafter referred to as the “Report”), which provided the above forecast.

Compared to the 2023-2025 period, the foreign dependence data will show a downward trend.

Last year, domestic crude oil production continued to increase, while crude oil imports reached 578 million tons, a year-on-year increase of 4.4%.

“Domestic oil consumption has expanded steadily with new developments, showing a more pronounced transformation trend. The energy consumption structure exhibits the characteristics of ‘decreasing gasoline and diesel, increasing jet fuel, and significantly rising chemical light oil,’” the Report noted.

In terms of total consumption, domestic oil demand growth remained generally stable. By 2025, domestic oil consumption is projected to reach 762 million tons, a 1.1% year-on-year increase, with demand growth primarily driven by the aviation and chemical sectors.

Simultaneously, driven by new production projects such as ethylene and paraxylene (PX), demand for chemical feedstocks is rising. By 2026, oil consumption is expected to grow by 0.4% year-on-year to 765 million tons.

In recent years, the transformation trend of “declining oil consumption and rising chemical demand” has become increasingly pronounced.

The report indicates that as the energy structure transformation deepens, new energy sources are forming a trend of replacing traditional fossil fuels. Domestic oil consumption will enter a peak plateau phase, with its role gradually shifting toward “transportation energy security + core feedstock energy.”

Specifically, refined oil demand will continue to decline starting in 2024, falling 3% year-on-year in 2025. In contrast, demand for chemical feedstock oil will become the new growth engine for petroleum consumption, rising 8.8% year-on-year in 2025.

On one hand, the driving force of alternative energy sources such as LNG and electricity is becoming increasingly significant.

In 2025, new energy vehicles will maintain strong growth momentum, with annual sales exceeding 16 million units, up 28% year-on-year, and a penetration rate approaching 50%.

Consequently, domestic refined oil consumption in 2025 will reach 378 million tons, a 3% year-on-year decrease. Gasoline and diesel consumption will decline by 2.4% and 4.4% respectively. After a post-pandemic rebound, jet fuel consumption will transition to moderate-to-low growth, increasing by 2.1% year-on-year.

In 2026, the substitution effect from electric vehicles and LNG heavy trucks is expected to become more pronounced.

The report indicates that annual refined oil consumption will decline to 363 million tons, a 3.9% year-on-year decrease. Gasoline and diesel consumption will decrease by 3.5% and 5.8% respectively, while jet fuel consumption will increase by 3.2%.

On the other hand, domestic chemical oil consumption is growing rapidly, with chemical light oil production and yield showing an upward trend year by year.

In 2025, China's chemical light oil production reached 184 million tons, an 8.8% increase from the previous year, with the chemical light oil yield rising to 25%, up 1.1 percentage points year-on-year. During the same period, the refined oil yield decreased by 3.7 percentage points, as projects like Guangxi Petrochemical and Jilin Petrochemical, which focus on “reducing oil and increasing chemicals,” came online.

Yield refers to the percentage of target product generated relative to the amount of reactant feedstock.

By 2026, China's chemical light oil production is projected to further increase to 198 million tons, a 7.6% year-on-year growth, with yield rising to 26.4%. The transformation effects of “reducing oil and increasing chemicals” will continue to unfold.

On the supply side of the petrochemical industry, China's self-sufficiency rate for petrochemical products has achieved a leap, and the resilience of the industrial chain continues to strengthen.

By 2025, China's ethylene equivalent imports are projected to reach approximately 15 million tons, with the equivalent self-sufficiency rate rising to 78.1%. The self-sufficiency rate for paraxylene (PX) will remain at 79.4%, significantly enhancing the supply capacity of petrochemical products.

By 2026, China is projected to add another 8.05 million tons/year of ethylene capacity, bringing total capacity to 70.75 million tons/year. Self-sufficiency rates for ethylene and PX will exceed 80%, further reducing ethylene equivalent imports.

Moving forward, new chemical materials will play an increasingly vital supporting role in sectors such as new energy, high-end equipment, electronics and information technology, and healthcare. During the 15th Five-Year Plan period, the annual growth rates for high-performance polyolefins, specialty engineering plastics, high-performance rubber, and high-performance fibers are projected to reach 9%, 10%, 10%, and 14%, respectively.

Looking at the global oil market, factors including trade friction have driven the 2025 global oil demand growth rate to a post-pandemic low.

Last year, global oil demand stood at approximately 103.6 million barrels per day. The growth rate dropped from 900,000 barrels per day the previous year to 700,000 barrels per day, with the negative impact of U.S. tariff policies accounting for about 200,000 barrels per day.

From a regional perspective, developing Asian countries were the primary drivers of growth, with demand increasing by 450,000 barrels per day last year. Global oil demand is projected to reach 104.3 million barrels per day in 2026, remaining largely unchanged year-on-year. The Asia-Pacific region will continue to account for the bulk of the increase, adding 500,000 barrels per day.

Amidst slowing demand growth, international oil prices and the U.S. dollar both declined in tandem last year, indicating a significant weakening of the dollar's influence on oil prices. By year-end, the U.S. Dollar Index had fallen 9.37% from its opening level, while Brent crude futures dropped 19.86% over the same period.

“Although the Federal Reserve resumed rate cuts in September, intensifying the dollar's downward trend, financial sector tailwinds failed to provide significant support to the international crude oil market due to weak macroeconomic confidence and heightened expectations of oversupply,” stated Wang Haibo, Director of the Petroleum Market Research Institute at CNPC Economic Research Institute.

Wang further noted that by 2026, the market anticipates at least two additional Fed rate cuts totaling 50 basis points, which will further depress the dollar index. However, this is still unlikely to provide effective support for oil prices.

Meanwhile, precious metal prices have surged, relatively diminishing the investment value of crude oil.

In 2025, amid heightened global macroeconomic uncertainty, precious metals' status as quasi-currencies and core safe-haven assets was unprecedentedly reinforced, driving substantial price increases for gold, silver, and other metals.

Gold futures surged from $2,660.9 per ounce at the beginning of the year to $4,324.5 per ounce by year-end, marking a 62.5% increase. The gold-to-oil ratio repeatedly hit record highs. In 2026, major institutions maintained bullish outlooks on commodities like gold and silver, with gold futures exceeding $5,000 per ounce by late January.

Wang Haibo noted that since 1988, the average gold-to-Brent crude ratio stood at 19.3. With the current ratio at 71.1, historical correlation patterns and asset pricing logic suggest potential for the ratio to revert toward its historical mean.

In 2025, international oil prices followed a downward trend with volatility. The average price of Brent crude futures stood at $68.19 per barrel, down $11.67 per barrel year-on-year—a 14.6% decline—marking the lowest level in nearly five years.

“In 2025, the global oil market was primarily driven by supply-demand fundamentals. Geopolitical conflicts only caused temporary disruptions to oil prices, failing to reverse the overall downward trend. The market shifted from a tight supply-demand balance to a significant surplus throughout the year, with an estimated annual supply surplus of 1.4 million barrels per day,” explained Wu Mouyuan, Deputy Director of the Economic Research Institute at PetroChina.

Currently, international oil prices are at a critical juncture where fundamental forces and geopolitical factors are in contention.

CNPC's Economic Research Institute projects that under a fundamentals-driven scenario, global oil demand growth will remain sluggish in 2026. With OPEC+ maintaining current policies and non-OPEC+ production continuing to rise, the oil market will persist in a supply surplus throughout the year. Inventory levels will surge significantly, causing international oil prices to fluctuate downward. The average price of Brent crude is projected to range between $60 and $65 per barrel.

Geopolitical conflicts will emerge as the most significant variable influencing oil prices. The Russia-Ukraine conflict and Middle East developments remain uncertain, while political instability persists in Venezuela and African resource-rich nations. Concurrently, the United States continues to escalate military threats against other countries. Under a geopolitical conflict-dominated scenario, the average Brent price could surge to $70–75 per barrel.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.