China's crude oil imports dropped 41.3% year-on-year in June, marking a decade low, as the country pivots towards electric taxis to reduce fuel demand.
This decline comes as the conflict in the Strait of Hormuz extends into its fifth month, prompting a shift in energy consumption strategies. As China is the world's largest crude importer, this transformation aims to lessen its vulnerability to Middle Eastern oil supply disruptions.
Impact of Electric Taxis
In June, China imported 29.27 million tonnes of crude oil, the lowest since October 2016. The ongoing crisis in the Strait of Hormuz, through which nearly half of China's seaborne crude typically passes, has intensified the need for alternative fuel sources. J.P. Morgan projects that petrol demand in China will decrease by 150,000 barrels per day this year and another 50,000 in 2027 due to this shift. Analyst Natasha Kaneva noted that the conflict might be accelerating pre-existing trends towards reducing oil dependency.
The Ministry of Transport reveals that approximately 50% of China's 1.3 million taxis are now electric, with larger cities aiming for complete electrification. Last year, Didi, a major cab-hailing service, added 2 million hybrid and electric vehicles, bringing its non-petrol fleet to 8 million. These electric vehicles now account for 75% of total mileage booked via the Didi app.
Fuel consumption patterns reflect these changes, with China using 10% less petrol and 14% less diesel in May compared to the previous year.
This article is for informational purposes only and does not constitute financial advice.
