Chinese oil demand growth has slowed since 2020 as the country transitions to greener energy, TotalEnergies TTE CEO Patrick Pouyanne said, though he said he was still optimistic long-term due to rising demand in India.

“You have demand growing again steadily, but one thing has changed in the last three or four years: it’s the Chinese engine for growth of oil demand, which was really strong between 2000 and 2020,” Pouyanne said. “That engine has slowed down.”

“They are moving in a direction where they need less oil, and are transitioning to depend less on oil.”

China has gone from adding some 600,000 barrels per day of oil demand growth annually to about 300,000 barrels per day today, the CEO told Abu Dhabi’s annual International Petroleum Exhibition and Conference (ADIPEC).

“But there are other countries like India, which we observe is moving to a more manufacturing economy, and they have demand growth of 200,000 barrels … so I’m not worried,” said Pouyanne.

The French oil major currently plans to grow upstream oil and gas production by 3% annually, primarily from projects that have a low breakeven to be able to weather fluctuations in oil price as a potential supply glut threatens to push Brent crude prices (LCOC1) below $65 per barrel in 2026.

“The job of an oil and gas company is not to just rely on the high oil price, it’s got to be able to capture the upside when price is good and to be resilient when the price is low,” Pouyanne said.

“My company’s breakeven pre-dividend is lower than $30 per barrel, and post-dividend lower than $50, so I’m safe.”
Source: Reuters