China is currently the world's largest importer of oil, the Telegraph reports. However, the news outlet also predicts that oil demand in China will soon start to fall, which is good news for the world but bad news for oil-exporting countries like Saudi Arabia.
Compared to last year, sales of fuel-burning cars have dropped steeply in China while sales of electric vehicles rose, the Telegraph reports. "Half of China's total car fleet could be electric by 2030," Lord Adair Turner, chairman of the global Energy Transitions Commission, told the Telegraph. "If you add up the numbers, that could subtract several million barrels of oil a day."
China is also investing in huge solar farms and other nonpolluting energy sources, the Telegraph says. The country is on track to reach 1,200 gigawatts of wind and solar by 2025, compared to 240 gigawatts installed in the U.S. since the start of the green era, according to the Telegraph. China's investment in renewables means less need for oil- and coal-based power plants.
Because of these changes, the Telegraph predicts that China will soon have much less demand for imported oil. Currently, it brings in 10.8 million barrels a day, according to the Telegraph. That accounts for about 19% of global demand for crude oil, reports OilPrice.com. However, according to Goldman Sachs analysts, "China's progress on renewables should help cut its energy imports by 10% by 2030," and they estimate China could cut its energy imports in half by the early 2040s.
For the Organization of the Petroleum Exporting Countries (OPEC), including Saudi Arabia, decreasing demand for oil means falling profits, the Telegraph reports. In an attempt to keep oil prices high, OPEC recently announced it will produce less oil, a move criticized by the Biden administration.
Meanwhile, less oil use is good news for the rest of the world. Not only could prices begin to fall despite OPEC's interference, but fewer fuel-powered cars and power plants means less heat-trapping air pollution, which could help bring down global temperatures.
"Whatever they say in public, the Saudis know the game is up," Kingsmill Bond of energy strategists RMI told the Telegraph. "They can see that the world's largest car market for [gasoline] cars is going to collapse."
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