China Think Tank: Global Oil and Gas Face Six Shifts in 2025

China's leading energy think tank has identified profound changes reshaping the global oil and gas industry, while highlighting China's stabilizing role amid rising uncertainty, according to a series of major industry reports released this week.

On February 3, the Economics & Technology Research Institute (ETRI) of China National Petroleum Corporation (CNPC) released the 2025 Domestic and International Oil and Gas Industry Development Report, the Global Energy Security Report (2025) and the Energy Data Handbook. The reports conclude that the global oil and gas sector is undergoing 'six major shifts,' while China's industry is supported by 'eight stabilizing trends' across economic growth, energy development and international cooperation.

Global Outlook: 'Six Shifts' Reshaping the Industry

The reports note that 2025 marks a period of deep global transformation, as geopolitical conflicts, economic restructuring and energy transition interact simultaneously. The global oil and gas industry is entering a complex new phase characterized by heightened volatility, systemic reshaping and structural realignment.

Geopolitical dynamics are undergoing a sharp shift, with multiple crises unfolding in parallel, old and new international orders overlapping, and major-power relations being deeply reconfigured. By 2026, global conditions are expected to feature intensified strategic competition, greater risk spillovers and accelerated supply-chain restructuring.

Economic growth drivers are also shifting, moving from cyclical recovery toward structural expansion. Large-scale applications of artificial intelligence and sustained investment in green and low-carbon transformation are projected to form dual growth engines in 2026. Energy demand is increasingly transitioning from pure volume expansion to a balance between scale growth and structural optimization.

Energy policy directions are diverging, with growing differences in global energy development pathways and visible fractures in climate consensus. Consumption of both fossil and non-fossil energy is rising in parallel, expanding the demand potential for fossil fuels and delaying the timing of peak oil and gas demand.

The oil market's dominant forces are shifting toward fundamentals, as global supply-demand conditions move from a tight balance to a clear surplus. In 2026, the market is expected to oscillate between oversupply realities and geopolitical risk. Under fundamentals-led conditions, Brent crude is projected to average USD 60–65 per barrel, while heightened geopolitical tensions could push prices to USD 70–75 per barrel.

Natural gas market dynamics are also changing, with global supply-demand conditions moving from tight balance toward relative looseness. In 2025, the market shows a 'tight early, loose later' pattern. In 2026, demand growth is expected to recover, but supply additions are forecast to exceed demand growth, opening a downward channel for international gas prices.

Global refining and petrochemical structures are being reshaped, with refining capacity recording a net decline of 4.85 million tonnes per year in 2025. In 2026, the industry is expected to show regional divergence and an eastward shift. Around 60 million tonnes per year of new refining capacity—mainly in Asia-Pacific, the Middle East and Africa—will raise the Eastern Hemisphere's share to 52%, while about 8 million tonnes per year of announced closures are concentrated in Europe and North America. Global ethylene capacity continues to expand amid industrial upgrading, with Asia's advanced capacity share rising and gradual shutdowns in Europe, Japan and South Korea.

China: 'Eight Stabilizers' Anchoring Industry Confidence

Amid mounting global uncertainty, the reports emphasize that China's stability provides critical certainty and growth momentum for the global oil and gas industry.

China's economy is expected to maintain steady growth with ongoing structural optimization, supported by the accelerated development of new-quality productive forces. These forces are strengthening the linkage between energy demand, industrial upgrading and technological innovation. Economic growth in 2026 is projected at around 5%, with an average annual growth rate of about 4.8% during the 15th Five-Year Plan period.

Energy development continues to improve steadily, with China's green and low-carbon transition gaining pace. In 2025, the country's energy self-sufficiency rate rose to 84.4%, while non-fossil energy accounted for 21.8% of total consumption. Wind and solar power became the main sources of incremental electricity supply, and the non-fossil share is expected to exceed 23% in 2026.

Oil and gas supply remains stable and growing. In 2025, the successful completion of the Seven-Year Action Plan lifted total oil and gas output to a record 420 million tonnes of oil equivalent. In 2026, crude oil production is expected to remain stable at around 200 million tonnes, while natural gas output continues to grow rapidly.

Petroleum consumption is showing stability alongside structural transformation. In 2025, China's oil consumption reached 762 million tonnes, up 1.1% year on year, with declines in gasoline and diesel use, growth in jet fuel demand, and a sharp rise in light petrochemical feedstocks. In 2026, total oil demand is expected to remain broadly stable, with a clearer shift from fuels to chemical feedstocks.

Natural gas consumption continues to grow steadily, reaching 432 billion cubic meters in 2025, with transport demand rising by more than 10% and steady growth in industrial and power-generation use. Consumption is forecast at 450–455 bcm in 2026 and around 550 bcm by 2030.

China's refining and petrochemical sector is accelerating transformation and upgrading. In 2025, refining capacity entered a plateau phase, while self-sufficiency in basic petrochemicals—ethylene, propylene and PX—rose to 80%. In 2026, an additional 15 million tonnes per year of refining capacity and 19 million tonnes per year of basic petrochemical capacity are expected, with domestic substitution of new materials accelerating.

China's major oil companies continue to develop steadily, with the three national oil companies recording consecutive record highs in oil and gas output. Combined production in 2025 is estimated to be about 20% higher than in 2019, supported by expansion into low-carbon energy, new materials and digitalization.

International cooperation remains robust, with Chinese companies making solid progress in overseas reserve additions and production. Overseas equity output reached 196 million tonnes in 2025, and is expected to exceed 200 million tonnes in 2026 as cooperation deepens across the full value chain and integration with new energy accelerates.