Investing.com -- China's oil consumption is projected to decline in 2026 as the country shifts toward new energy sources and faces elevated oil prices linked to conflict in Iran, according to a report from PetroChina's research division.

The world's second-largest oil consumer is forecast to use 753 million tons of oil in 2026, representing a 4.9% decrease from 2025, when consumption increased 3.6%, the PetroChina Planning and Engineering Institute reported.

China's crude production is expected to reach 217 million tons in 2026, marking a 0.5% increase from the previous year. Oil refining capacity is projected to expand to 963 million tons per year in 2026, adding 15 million tons to current capacity.

Refined oil consumption is forecast at 324 million tons in 2026, down 6.4% from 346 million tons in 2025. This decline represents a faster rate of contraction compared to the 3.5% drop recorded in the previous year. Jet fuel stands as an exception, with consumption anticipated to grow 0.2% in 2026.

The report indicates oil demand is reaching a plateau and is projected to fall to approximately 700 million tons by 2030.

Natural gas consumption is expected to grow between 1.3% and 2.5% in 2026, reaching 440 to 445 billion cubic meters, up from 434.3 billion cubic meters in 2025. Gas demand is forecast to rise further to 530 to 550 billion cubic meters by 2030.

New ethylene capacity additions are projected at 6.72 million tons per year in 2026, with 4.15 million tons coming from naphtha crackers.

Demand for polyolefin elastomers is forecast to grow 21.4% in 2026, while carbon fiber demand is expected to increase 48.7%. Domestic production of both materials as a percentage of total consumption improved in 2025, with polyolefin elastomers rising 11.9 percentage points and carbon fiber increasing 0.7 percentage points.