China’s oil demand is projected to decline by 600,000 barrels per day in 2026 from this year, an 8.9% drop that would mark a third consecutive annual decrease for the world’s largest crude importer. The estimate from Sinopec’s Economics & Development Research Institute reverses an earlier forecast for 300,000 to 500,000 bpd of growth after the US-Iran conflict intensified. Gasoline demand is expected to fall 8.7% to 149 million metric tons, while diesel declines 11.4% to 164 million metric tons; jet-fuel demand is projected to rise 1.3% to 41.55 million metric tons. China’s refining capacity is forecast to reach 952 million tons per year, but crude processing is expected to fall to 697 million tons in the second and third quarters of 2026. Higher prices, uncertainty around supplies through the Strait of Hormuz and the structural shift toward electric vehicles are weighing on demand and could contribute to lasting losses, analysts say. Prediction-market pricing assigns a 1.4% probability to crude oil reaching a new all-time high by September 30, 2026, and 10.5% by December 31, 2026.