How China Curbed Its Oil Addiction—And Blunted a U.S. Pressure Point

As electric vehicle sales surged, China ramped up subsidies to build public charging ports, resulting in over 14 million charging points by May

- Brian Spegele

China's thirst for oil drove global demand for decades. Now a government campaign to curb that addiction is nearing a milestone, with national consumption expected to peak by 2027, then begin to fall.

Chinese officials have long worried that the U.S. and its allies could hamstring the nation's economy by choking off its supply of foreign oil. So China has poured hundreds of billions of dollars into weaning itself off the imported stuff by reviving domestic production and swiftly building the world's leading electric-vehicle industry.

"The energy rice bowl must be held in our own hands," Chinese leader Xi Jinping has said.

Across China, fleets of gas-guzzling Volkswagen and Hyundai taxicabs are being replaced by electric models designed and produced locally. Last year, nearly half of passenger vehicles sold in the country were either all-electrics or plug-in hybrids, compared with 6% in 2020. THE WALL STREET JOURNAL.

In a remote corner of China called the "sea of death" for its harsh conditions, oil workers are trying to coax more crude out of the ground by drilling holes as deep as Mt. Everest is high. State-owned PetroChina reported $38 billion of capital expenditures last year, nearly as much as Exxon Mobil's and Chevron's combined.

China boosted oil output by 13% from 2018 to 2024, to around 4.3 million barrels a day. Crude imports fell nearly 2% last year, though they have rebounded slightly this year as some Chinese companies built stockpiles.

China's biggest state oil companies and the International Energy Agency all forecast that China's demand for oil will likely peak within two years, while gasoline and diesel demand has already topped out.