Oil demand from China's transportation sector will peak in 2030, and flatten thereafter, mainly 

due  to  falling  gasoline  demand  for  passenger  vehicles  that  become  more  efficient and 

increasingly electricity-driven, the International Energy Agency said in its latest World Energy 

Outlook report Tuesday. 

The flattening of China's oil demand growth reflects its fundamental change from an industry-

driven economy to one based on services and consumption. It also has major implications for 

Beijing's reliance on oil imports, energy security and the overall energy mix. 

"China's energy future will not be a continuation of previous trends," the IEA said, adding that 

the  country's  energy  choices  will have profound implications  for global markets, trade and 

investment flows. 

Oil will still remain the backbone of China's transport fuel demand till 2030, growing by 3.3% 

per  year  on  average,  but  its  share will fall to just above three-quarters, from nearly 90% 

today, the  IEA  said. The  remaining 25% of transport fuels will be biofuels, natural gas and 

electricity. 

The  IEA  said  that China would become the world's largest oil consumer by the early 2030s, 

overtaking the US, and touch 15.5 million b/d in 2040. But the slowdown means that India will 

become the largest source of global oil demand growth from around 2025. 

The  slowdown  in  China's  oil  demand  growth  post  2030 comes primarily from a decline in 

gasoline use from passenger cars, offsetting healthy diesel use from freight trucks, kerosene 

use in aviation and heavy fuel oil use in shipping. 

The  decline  in  gasoline  demand  is in turn driven by three major factors -- plateauing of the 

passenger car fleet size, greater fuel efficiency and the rise of electric vehicles.