If there is one figure Gulf economic policymakers should watch as carefully as the oil price, Dubai property prices, or US interest rates, it’s probably Chinese oil demand. The world's second largest economy has a huge hunger for petroleum that has been the mainstay of the market since the early 2000s. Now it seems to be ebbing – and whether this is cyclical or structural, temporary or permanent, is crucial.
Chinese economic performance and lacklustre oil demand has weighed on oil prices all year. Implied demand for the first seven months of this year is nearly 2 per cent down from the same period last year. As domestic production has gained modestly, that translates to a 3.1 per cent fall in oil imports. When those imports reflect more than a tenth of all global oil production, even a modest drop causes major ripples.
This lower import share has to be parcelled out among competing suppliers. Remarkably, Iran, under the guise of “Malaysia”, has become China’s largest seaborne supplier. Russia is the biggest provider overall, including its exports by pipeline, and has gained market share since early 2022 by diverting the supplies that formerly went to Europe.
But Russia’s sales to China last month were still the lowest since early last year, and Iraq’s were the least since January. Saudi Arabia did not benefit much, its sales were basically flat. Of China’s other top suppliers, the UAE, Kuwait, the US and Kazakhstan all saw their volumes drop. Only Oman and Angola of the other major providers registered a gain this year.
In this month’s report, Opec for the first time downgraded its global demand estimates for this year, while the International Energy Agency also cut its already bearish forecast. There is still a huge gap between them, amounting to 1.22 million barrels per day, or more than half the amount of Opec+ voluntary cuts intended to be eliminated from October onwards.
Both said weak Chinese demand was a key reason for the cuts. But with apparent Chinese crude demand down, the last few months of the year will have to be strong to register any growth. The outlook for next year is cloudy, too, despite the two agencies concurring on roughly 300,000 barrels per day of growth.
Rather than exporting more refined products, China has cut back refinery runs, which at least gives some relief to the industry elsewhere. The famous independent “teapot” refineries are operating at less than half of capacity.
So why is Chinese oil demand weak – and is it going to recover? There are three reasons, one cyclical, one structural and one technological.
Part of the explanation is in the post-Covid recovery, which led to strong growth last year, jumping to 15 to 16.6 million barrels per day, but which is now mostly exhausted. Jet fuel demand is the one bright spot, with foreign passenger flights still not back to 2019 levels.
General economic weakness is another key contributor. This is a mix of cyclical and at least semi-permanent features. Growth of 4.7 per cent in the second quarter was below target, with the puncturing of the real estate bubble and more barriers to exports. A prominent adviser to the central bank, Yiping Huang, said that the economy was once “easy to heat, difficult to cool”, but was now “easy to cool, difficult to heat”.
Slowing construction and goods transport cuts diesel demand, even though the manufacturing sector still hums along. The country’s working-age population peaked around 2014-2015, and on current trends, the total population will be less than half current levels by 2100 – within the lifetime of those born today.
But increasingly the dominant factor is technological: a shift away from oil in the economy. About 25 per cent of Chinese petroleum consumption is diesel, used in construction, industries, trains, buses and lorries. 24 per cent is petrol for cars. And 19 per cent is petrochemical feedstocks. The first two of these are under major pressure.
Liquefied natural gas is replacing diesel in heavy goods vehicles, saving 220,000 barrels per day last year. An expected global glut of LNG from around 2026-2027 will further encourage this substitution. As renewables replace coal, diesel demand for mines, lorries, goods trains and barges will also drop.
More than half of passenger cars sold last month were electric or hybrid. This will grow further with financial incentives to scrap older petrol or diesel vehicles, and continuing improvements and falls in sales prices of battery cars. The share of electric vehicles in the total fleet has reached 11.5 per cent, up from 7.7 per cent a year ago, which should therefore have cut petrol demand by nearly 4 per cent, or about 150,000 barrels per day.
The leading state oil company, PetroChina, itself says that national oil consumption in transport will peak next year at the latest. BP sees the overall peak in 2030 on current trends, but only 400,000 barrels per day above current figures. Yet Opec forecasts 4 million barrels per day of Chinese demand growth by 2045.
Beijing has strong economic and strategic reasons to continue this shift. Oil imports are a major vulnerability, particularly in the event of disputes or outright conflict with the US. Purchases from Iran, Venezuela and Russia are hampered by US sanctions. And most petroleum imports come from the US itself, or through maritime passageways in the Middle East and South-East Asia that could easily be blocked by the US Navy.
Whether powered by coal, nuclear power or renewables, battery cars boost domestic energy self-sufficiency. And they are less environmentally damaging in carbon dioxide emissions – particularly as China’s grid cleans up – as well as in local air pollution.
Chinese electric vehicles have quickly moved to dominate not just the domestic market, but exports, too. In the last quarter, BYD passed Honda and Nissan to become the world’s seventh-biggest car maker – of all types. China only became a net exporter of cars in October 2021. Now, it has overtaken Japan as the world’s biggest automotive exporter.
It has built a complex, integrated supply chain with a high level of self-sufficiency in everything from raw materials to batteries. Now it needs to sell more electric cars both at home and abroad to absorb fast-growing output. The challenge to oil exporters is not just that China’s own prodigious oil hunger is now waning – but that it will export that loss of appetite to the rest of the world.
Robin M Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis
Match info:
Burnley 0
Manchester United 2
Lukaku (22', 44')
Red card: Marcus Rashford (Man United)
Man of the match: Romelu Lukaku (Manchester United)
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
ZIMBABWE V UAE, ODI SERIES
All matches at the Harare Sports Club:
1st ODI, Wednesday - Zimbabwe won by 7 wickets
2nd ODI, Friday, April 12
3rd ODI, Sunday, April 14
4th ODI, Tuesday, April 16
UAE squad: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
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Pakistan Super League
Previous winners
2016 Islamabad United
2017 Peshawar Zalmi
2018 Islamabad United
2019 Quetta Gladiators
Most runs Kamran Akmal – 1,286
Most wickets Wahab Riaz –65
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Spare
Profile
Company name: Spare
Started: March 2018
Co-founders: Dalal Alrayes and Saurabh Shah
Based: UAE
Sector: FinTech
Investment: Own savings. Going for first round of fund-raising in March 2019
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Karwaan
Producer: Ronnie Screwvala
Director: Akarsh Khurana
Starring: Irrfan Khan, Dulquer Salmaan, Mithila Palkar
Rating: 4/5
The specs: 2018 Mitsubishi Eclipse Cross
Price, base / as tested: Dh101,140 / Dh113,800
Engine: Turbocharged 1.5-litre four-cylinder
Power: 148hp @ 5,500rpm
Torque: 250Nm @ 2,000rpm
Transmission: Eight-speed CVT
Fuel consumption, combined: 7.0L / 100km
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
The biog
Favourite book: Animal Farm by George Orwell
Favourite music: Classical
Hobbies: Reading and writing
The specs
Engine: 3.0-litre 6-cyl turbo
Power: 374hp at 5,500-6,500rpm
Torque: 500Nm from 1,900-5,000rpm
Transmission: 8-speed auto
Fuel consumption: 8.5L/100km
Price: from Dh285,000
On sale: from January 2022
WITHIN%20SAND
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SPECS
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UAE currency: the story behind the money in your pockets
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
Liz%20Truss
%3Cp%3EMinisterial%20experience%3A%20Current%20Foreign%20Secretary.%0D%3Cbr%3E%0DWhat%20did%20she%20do%20before%20politics%3F%20Worked%20as%20an%20economist%20for%20Shell%20and%20Cable%20and%20Wireless%20and%20was%20then%20a%20deputy%20director%20for%20right-of-centre%20think%20tank%20Reform.%0D%3Cbr%3E%0DWhat%20does%20she%20say%20on%20tax%3F%20She%20has%20pledged%20to%20%22start%20cutting%20taxes%20from%20day%20one%22%2C%20reversing%20April's%20rise%20in%20National%20Insurance%20and%20promising%20to%20keep%20%22corporation%20tax%20competitive%22.%3C%2Fp%3E%0A
The%C2%A0specs%20
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SUZUME
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BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
COMPANY%20PROFILE
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The%20specs
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More from Rashmee Roshan Lall
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
Indian construction workers stranded in Ajman with unpaid dues
Dengue%20fever%20symptoms
%3Cp%3EHigh%20fever%20(40%C2%B0C%2F104%C2%B0F)%3Cbr%3ESevere%20headache%3Cbr%3EPain%20behind%20the%20eyes%3Cbr%3EMuscle%20and%20joint%20pains%3Cbr%3ENausea%3Cbr%3EVomiting%3Cbr%3ESwollen%20glands%3Cbr%3ERash%26nbsp%3B%3C%2Fp%3E%0A
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
The%20specs
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Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital
SPEC SHEET
Display: 6.8" edge quad-HD dynamic Amoled 2X, Infinity-O, 3088 x 1440, 500ppi, HDR10 , 120Hz
Processor: 4nm Snapdragon 8 Gen 1/Exynos 2200, 8-core
Memory: 8/12GB RAM
Storage: 128/256/512GB/1TB
Platform: Android 12
Main camera: quad 12MP ultra-wide f/2.2, 108MP wide f/1.8, 10MP telephoto f/4.9, 10MP telephoto 2.4; Space Zoom up to 100x, auto HDR, expert RAW
Video: 8K@24fps, 4K@60fps, full-HD@60fps, HD@30fps, super slo-mo@960fps
Front camera: 40MP f/2.2
Battery: 5000mAh, fast wireless charging 2.0 Wireless PowerShare
Connectivity: 5G, Wi-Fi, Bluetooth 5.2, NFC
I/O: USB-C
SIM: single nano, or nano and SIM, nano and nano, eSIM/nano and nano
Colours: burgundy, green, phantom black, phantom white, graphite, sky blue, red
Price: Dh4,699 for 128GB, Dh5,099 for 256GB, Dh5,499 for 512GB; 1TB unavailable in the UAE
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
