China's Emissions Drop
China's carbon dioxide emissions from energy and industry fell 3.1% year-on-year in the third quarter of 2026. This marks the largest quarterly decline since the pandemic. The drop is linked to a 4% reduction in crude oil use, according to the Centre for Research on Energy and Clean Air (CREA). The decline in emissions shows a broader trend of decreasing fossil fuel use. This trend is partly driven by the ongoing crisis in the Strait of Hormuz, which has disrupted energy shipments.
Transport oil use saw a sharper decline, dropping by 9% during the quarter. The CREA analysis noted that this shift is partly due to more people using electric vehicles and taxis. Coal consumption also decreased by 3.3%. Improvements in wind and solar energy efficiency helped reduce overall energy demand. CREA analysts stated, "The sharp decline in China’s CO2 emissions extends a 'flat or falling' trend that began in March 2024 and has now lasted more than two years."
China's emissions have now fallen by 0.5% in the first three quarters of the year. This suggests a potential continuation of this trend for the full year. The analysis also highlighted that China saved about $9.1 billion from oil and gas imports between March and August. This saving came as China shifted towards alternative energy sources to lessen the impact of high oil prices.
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This decline in emissions and oil demand could affect global oil prices. China is the world's largest crude importer. A sustained drop in China's fossil fuel use may lead to lower demand for oil. This could stabilize or reduce prices in the international market. Investors will keep an eye on further developments in the Strait of Hormuz. Any escalation in the crisis could impact energy supply chains and pricing dynamics.
Based on reporting by: oilprice.com, businesstimes.com.sg