According to Standard Chartered, China’s oil demand is likely to fall this year compared to 2021 due to decreasing economic development and the extension of new COVID-related lockdowns. According to a note from Standard Chartered Global Research dated May 3rd, demand forecasts in the world’s biggest crude oil importer have worsened over the previous week.

The bank has revised its prediction for China’s oil demand in 2022 from a growth of 78,000 barrels per day (bpd) to a decline of 82,000 bpd due to weak macroeconomic indicators and the lockdowns.

The start of strict lockdowns in Shanghai and other cities last month resulted in the worst reading of factory and service sector activity in China since February 2020, when the pandemic began.

In their most recent assessments, both OPEC and the International Energy Agency (IEA) lowered their global oil demand growth predictions for 2022, citing China’s slowdown. With the Russian war in Ukraine and the reintroduction of COVID lockdowns in China, OPEC reduced its demand growth projection by over 500,000 bpd. The International Energy Agency (IEA) lowered its worldwide demand forecast for 2022 by 260,000 bpd, citing the resumption of severe lockdowns in the world’s top oil importer.

Commenting on China’s oil demand prospects for this year, SC’s analysts said: “Other estimates still show strong China demand growth (for example, the OPEC Secretariat forecast is growth of 480kb/d in 2022), and we think consensus estimates are likely to fall sharply in coming months.”

Ahead of the OPEC+ meeting today, May 5, the note said: “we expect the current unwinding of production cuts to continue as per the agreed schedule, with once again limited market commentary being provided by ministers.”