In 2025, China's refined oil consumption continued to decline, with the annual consumption volume decreasing by another 3.62% compared to the previous year, falling back to levels close to those in 2021. Meanwhile, the penetration rate of electric vehicles surpassed 30%, and both wind and solar power generation broke through the trillion-kilowatt-hour mark. The increase in electricity consumption in the entire society was entirely provided by renewable energy. As can be seen from the recently released "China Refined Oil and Alternative Energy Analysis and Outlook Report Blue Book (2025)" (hereinafter referred to as the "Blue Book"), the "one decrease and one increase" in data highlight a structural turning point in the energy for transportation—peak demand for traditional oil products will no longer grow, and electric power, green hydrogen, biomass, and other alternative forces are gradually moving to the center. A new pattern of multi-energy complementarity is accelerating its formation.
■■Traditional refined oil market is under pressure to go down
In 2025, the supply and demand sides of the refined oil market shrank simultaneously. On the consumption side, gasoline consumption decreased by 4.3% year-on-year, and diesel consumption fell by 4.0%, with annual consumption volumes of 155 million tons and 203 million tons, respectively. The only exception was jet fuel, which saw a consumption volume of 40.21 million tons, a year-on-year increase of 1.3%, relying on the recovery of the civil aviation industry to become the only category among the three major oil products with positive growth.
"A direct cause is that electric vehicles are increasingly popular, with a penetration rate exceeding 30%, and the slowdown in freight demand has put pressure on the traditional fuel market," said Sun Renjin, a professor at China University of Petroleum (Beijing).
On the supply side, the national refining capacity increased slightly to 939 million tons/year, but the average operating rate of refineries was only 78.5%, and independent refineries were even below 55%, remaining at a low level. Large refining and chemical projects such as Zhenhai Refining and Chemical and Yulong Petrochemical are still being put into production one after another, the pressure to eliminate backward capacity continues to increase, and the trend of resources gathering in leading enterprises is obvious.
China demand is sluggish, and exports have become a release valve. In 2025, the export of refined oil products reached 58.02 million tons, with the total volume basically the same as the previous year, but the structure has changed significantly. Among them, the export share of aviation coal oil increased to 37.5%, squeezing traditional gasoline and diesel off the main position.
Price and export changes are ultimately transmitted to the terminal network. There are about 110,000 gas stations nationwide, a slight decrease year-on-year. The annual fueling volume of single stations of Sinopec and Sinopec has dropped to 3470-3124 tons, and the sales intensity of single stations continues to decline. "The amount of oil sold at each station is decreasing, and the frequency of station visits is also decreasing. It is difficult to continue with the business model of just fueling," Sun Renjin pointed out that the industry is accelerating the transformation to digital and intelligent comprehensive and diversified energy supply, and the transformation of gas stations to "oil, gas, hydrogen, electricity, and service" integrated comprehensive energy service stations is more obvious and clear. This terminal transformation will further accelerate this year.
■■Alternative energy expansion
In 2025, China's total primary energy production exceeded 5 billion tons of standard coal for the first time, and the share of non-fossil energy consumption reached 21.7%. "A key signal is that the entire increase in electricity consumption in the whole society has been provided by renewable energy, which means that the incremental part of the power system has completely got rid of the dependence on fossil energy," said Sun Renjin.
Photovoltaic and wind power have become absolute protagonists. The "Blue Book" shows that by 2025, the installed capacity of photovoltaic power generation will exceed 120 million kilowatts, an increase of 35% year-on-year, with a power generation of 1170 billion kilowatt-hours; the installed capacity of wind power will reach 640 million kilowatts, with a power generation of 1130 billion kilowatt-hours, and the two major clean energy have leaped to the core pillar of the power system.
Meanwhile, the penetration rate of electric vehicles increased to 30.9 percent, with both the production and sales of pure electric passenger cars exceeding 10 million units. More tellingly, the pure electric heavy trucks sold 233,000 units for the whole year, a year-on-year increase of 1,820 percent, and the penetration rate in December exceeded 50 percent for the first time. "Commercial vehicles were the main market for diesel consumption in the past, but now the wave of electrification has fully spread from passenger cars to the commercial vehicle sector," said Sun Renjin.
The map of alternative energy is far more than electricity. The "Blue Book" points out that the sales of LNG heavy trucks in 2025 will reach about 199,000 vehicles, accounting for 24.8%; the installed capacity of biomass power generation will reach 47.43 million kilowatts, and the power generation will reach 224.7 billion kilowatt-hours, ranking first in the world for seven consecutive years. New types of fuels such as green hydrogen, green ammonia, and green methanol have gone out of the laboratory and entered the stage of large-scale pilot projects, with green hydrogen projects accounting for 75%, and are beginning to play a role in scenarios such as shipping, chemical industry, and power that are difficult to electrify. The pattern of alternative transportation and energy with electricity as the main part and multi-energy complementarity is moving towards reality.
■■Transformation to diversify and advance simultaneously
The Blue Book predicts that in 2026, international oil prices will exhibit the operational characteristics of "sharp short - term fluctuations at high levels and a gradual return to fundamental - driven as the Middle East situation eases". If the Middle East situation eases in the future, the annual average should operate in the range of $70 - $100 per barrel. Industry insiders pointed out that geopolitics can only create short - term disturbances and cannot reverse the long - term direction determined by the supply - demand fundamentals.
From a long-term global perspective, oil is not expected to exit the stage immediately. Global oil demand is expected to reach a high plateau of 106 million barrels per day by 2030, but fuel oil will peak around 2027, and the petrochemical industry will become the core driving force for demand growth. This means that for Chinese refining and chemical enterprises, the space for simply producing transportation fuel is becoming increasingly limited, and extending towards chemical processing and enhancing product added value is a more sustainable path.
This year, the China refined oil market will continue to face pressure. The "Blue Book" predicts that electric vehicle sales will reach 19 million units, a year-on-year increase of 15.2%, with a penetration rate exceeding 60%. The installed capacity of wind and solar power will continue to expand, and the proportion of renewable energy power generation will continue to increase. New energy heavy trucks will maintain rapid growth, and the production and capacity of green hydrogen, green ammonia, and green methanol will enter a growth channel, and will begin to be applied on a large scale in scenarios such as shipping and chemical industry.
"The industry will form an alternative pattern of 'electricity as the main energy source and multiple energy sources complementing each other' in the transportation sector, which will deeply support the implementation of the dual-control system for carbon," said Sun Renjin. This means that in the future, no single energy source will dominate all others, but rather, each will excel in different scenarios. "The transformation of traditional oil companies, the expansion of power infrastructure, and the cost reduction and efficiency improvement of new fuels will determine the speed and quality of China's energy transition," he said.
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