China's oil consumption fell 9% year over year in the second quarter as expensive crude accelerated the adoption of electric cars, trucks, rail, and industrial equipment.

The decline helped cut China's carbon dioxide emissions by 1% during the quarter, according to an analysis by the Centre for Research on Energy and Clean Air (CREA). It was the first quarterly emissions decline in China driven primarily by lower oil consumption. Power-sector emissions, however, rose 3% over the same period as coal-fired generation increased.

Electric vehicles displaced 36 million metric tons of oil during the first half of 2026, accounting for roughly one-third of the reduction in Chinese oil demand. In the second quarter alone, EVs displaced 19 million tons — 50% more than a year earlier. That trajectory builds on years of policy support: China has spent more than a decade subsidizing EV manufacturing and purchases, and plug-in models now account for more than half of new cars sold in the country.

Electric trucks produced the fastest change. Alternative-fuel use in China's trucking sector jumped 90% year over year between January and June, reducing diesel consumption in one of the country's largest transportation fuel markets.

Oil became more expensive after the Iran war disrupted Persian Gulf supply and traffic through the Strait of Hormuz. China cut crude imports and drew more heavily from inventories. At the same time, EVs and electric trucks were replacing more gasoline and diesel, giving China another lever to reduce its exposure to high oil prices — a strategic consideration for a country that imports the bulk of the crude it consumes.

Oil use also fell in construction and mining as electric equipment replaced diesel-powered machinery, while slower growth in China's chemical sector removed another source of petroleum demand.

CREA estimates that lower oil consumption prevented roughly 35 million tons of carbon dioxide emissions during the second quarter, equal to about 1.3% of China's total emissions over the period. The calculation includes emissions associated with the electricity used to charge EVs.

China remains the world's largest crude importer, meaning changes in its transportation fleet carry consequences well beyond the country's own emissions numbers. Because China accounts for a large share of global oil demand growth in recent years, a sustained slowdown in its consumption would remove a major source of support from world oil markets.

CREA expects Chinese emissions could fall for the full year as oil demand weakens, property activity remains subdued, and coal-to-chemicals production runs near capacity.

For oil producers, the 9% decline is the number to watch. China's enormous EV fleet was already eroding gasoline demand, and crude above $90 is now speeding up diesel displacement as well. The International Energy Agency has projected that global oil demand could peak before the end of the decade, with EV adoption in China cited as a central driver.

By Julianne Geiger for Oilprice.com