By VITALII @Adobe Stock

Clyde Russell of Reuters reports that working hard to cut its reliance on imported oil by ramping up electric vehicle adoption. OPEC countries, suggests Russell, are underestimating the speed of China’s transition. Russell writes:

Over-estimating China’s appetite for crude has been a factor in oil markets this year, especially by OPEC, and it’s a theme that looks likely to continue in coming years.

The increasing shift to electricity in transport from fossil fuels and what it termed “electric mobility” is “wrong-footing oil producers,” according to the International Energy Agency’s latest World Energy Outlook, released on Wednesday.

It’s China, the world’s biggest oil importer, that is leading the drive to electric vehicles, with 50% market share in new sales already achieved, a level the rest of the world is likely to reach by 2030, according to the IEA.

Under this forecast, which is the IEA’s base case it calls the Stated Policies Scenario (STEPS), the rise of EVs displaces around 6 million barrels per day of global crude oil demand.[…]

Power Switch
It’s clear that China is pushing electrification hard, and it now dominates the manufacturing of solar panels, batteries and EVs.

It is using this competitive advantage to cut its reliance on expensive imported fossil fuels.

But it is also prepared to use its vast domestic coal reserves, and cheap coal imports, to help drive electrification.

The main challenge for China will be integrating the massive amounts of renewable generation it still plans to install into its electricity grid. […]

It’s likely that the pace of storage capacity additions will have to be accelerated as more renewables enter the grid, and this has implications for China’s demand for battery metals, such as lithium, copper and nickel.
However, it’s crude oil that is likely to be the commodity most affected by China’s rapid electrification.

While China’s overall oil demand will peak in the next few years, it’s also likely that the mix of products it will require will shift. […]

China will use less gasoline and diesel, but likely need more naphtha to meet rising petrochemical demand, as well as more jet kerosene as air travel expands.

Read more here.