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China Gasoline Demand Weakens Amid Oil Price Surge and EV Acceleration

China's gasoline consumption is projected to decline further in 2026 as elevated crude prices and accelerating electric vehicle adoption reshape the country's fuel landscape. The Iran conflict has driven oil costs higher, pressuring refiner margins and intensifying the transition away from internal combustion engines. Factory-gate inflation in China reached its fastest pace since the pandemic, reflecting broad cost pressures from the Middle East disruption. Metal exports, particularly aluminum shipments, are gaining momentum as regional supply constraints and surging clean-technology demand offset weaker traditional fuel markets. The shift underscores structural changes in China's economy as energy costs redirect investment toward electrification and away from petroleum-dependent sectors.