Travel is key driver for elevated oil demand in China: S&P Global

Oil barrels

China's economic recovery is key for global oil markets, as post-pandemic trends are driving demand, Carlos Pascual, senior vice president for global energy and international affairs at S&P Global Commodity, told CNBC.

It was not about manufacturing; it was about airplanes and gasoline. After the pandemic-related restrictions were lifted, people wanted to wander again, Pascual explained.

Therefore, travel — and not manufacturing — is the key driver behind increased oil demand in China, he added, expecting this elevated demand to dampen over the next year.

S&P Global recently stated that it expects total oil demand in China to grow this year by 6.1% year-on-year (YoY), or 940,000 barrels per day (bpd), to 16.4 million bpd, before rising by 3.5% YoY in 2024.