China’s Electric Truck Surge Accelerates Diesel Decline and Reshapes Oil Demand Forecasts

Economic

Summary:

A sharp rise in electric truck sales in China is rapidly reducing diesel usage, surprising analysts and potentially bringing forward the country’s oil demand peak...

Electric Truck Growth Outpaces Expectations, Alters Forecasts

In the first half of 2025, China recorded a 175% year-on-year jump in electric truck sales, reaching over 76,100 units, according to Sublime China Information (SCI). These vehicles now comprise a quarter of new truck sales, with more than 90% of this growth attributed to electric models, largely used in port logistics, mining, and industrial sites. This surge is far outpacing earlier forecasts and has led market analysts to revise down diesel demand expectations and reassess the timing of China’s oil demand peak.

Ye Lin, vice president at Rystad Energy, noted that the rapid adoption of electric heavy-duty vehicles (HDVs) has likely accelerated China’s oil demand peak to 2025, instead of 2026 as previously forecast. Rystad projects that diesel consumption in China’s transport sector will drop 40% by 2030, cutting overall diesel use by 25% compared to 2024 levels.

Diesel Use Already in Decline Amid Electric Disruption

SCI forecasts diesel consumption to fall 6.3% this year, equivalent to 11.3 million tons, echoing a similar decline in 2024. The combination of electric and LNG truck growth, in tandem with slower economic expansion, is substantially reshaping China’s energy demand curve.

Li Shuai, a truck driver for a Hebei cement plant, emphasized how improved charging infrastructure has made long-distance electric truck travel increasingly viable. He described traveling over 2,000 kilometers from Beijing to Yunnan without logistical concern an unthinkable scenario just a year ago.

Subsidies and Cost Parity Drive Adoption

Government subsidies, introduced in July 2024 and reaching up to 95,000 yuan (US$13,264) per new electric truck, are a core catalyst of this shift. While diesel trucks are cheaper upfront, operating costs tip the scales over time. According to GL Consulting, after one million kilometers of usage:

Diesel trucks cost approximately 2.25 million yuan (US$314,000)

LNG trucks cost about 10% less

Electric trucks cost roughly 15% less

This cost advantage is compelling fleet operators to transition, particularly in logistics, cement, and industrial sectors where margins are tight.

Charging Infrastructure Expands Rapidly

The success of electric trucks is also underpinned by China’s massive rollout of EV charging infrastructure, particularly in industrial corridors. Charging network developer Teld has built over 2,400 truck charging stations, including an 800-kilometer corridor linking Shanxi and Shandong regions critical for coal and steel logistics.

Operators like Yongji Liu, who initially focused on passenger EV chargers, are now installing truck-specific charging bays due to overwhelming demand. This ecosystem effect further reinforces electric truck viability.

LNG Trucks Lose Steam Amid Fuel Price Volatility

Sales of LNG-powered trucks once touted as a transitional alternative have declined by 15% year-on-year to 92,000 units, hampered by rising LNG prices and limited refueling stations. While LNG trucks remain viable in specific corridors, their slower growth has failed to counterbalance the broader decline in diesel use.

According to SANY, China’s second-largest electric truck manufacturer, fleet electrification is poised to outpace passenger EV growth due to clearer financial benefits for business users. The company forecasts that electric HDVs could capture 70% to 80% of new sales by 2027, fueled by lower operating costs and robust infrastructure development.

This trend implies a major long-term realignment in China’s energy profile, not only reducing diesel dependence but also weakening oil import volumes reshaping global demand patterns.

China’s Diesel Era Enters Structural Decline

The explosive growth of electric heavy trucks in China marks a tipping point for diesel fuel consumption and underscores the country’s rapid decarbonization in the transport sector. With supportive policy, strong infrastructure, and favorable operating economics, electric trucks are not just a substitute they’re quickly becoming the dominant commercial transport solution in the world’s largest logistics and industrial market.

Global oil producers and traders will need to adapt quickly as China’s energy transition shifts from light-duty to heavy-duty transport, with significant implications for diesel refining margins, LNG investments, and commodity price forecasts.

Source: Reuters

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Gerik

Economic

Commodity

Oil Finds Some Relief but Remains Fragile

Following a sharp decline driven by macroeconomic concerns, Brent crude rebounded by 19 cents to trade at $68.83 per barrel, while U.S. West Texas Intermediate (WTI) rose 26 cents to $66.83, representing a modest 0.39% uptick. Despite this slight recovery, overall sentiment remains cautious amid a complex backdrop of political risk, trade barriers, and downgraded demand expectations.

The slight price gains appear to be technical in nature, as traders absorbed the earlier losses triggered by a new wave of protectionist measures and uncertain forward demand. The recovery also reflects position adjustments ahead of further clarity from the U.S. administration and OPEC-related developments.

OPEC’s Demand Forecast Cut Signals Longer-Term Concerns

The most bearish signal came from OPEC’s 2025 World Oil Outlook, which revised global oil demand for 2026–2029 downward, citing notably slowing Chinese consumption. OPEC now projects global demand to average 106.3 million barrels per day in 2026, significantly below its previous estimate of 108 million bpd.

This adjustment reflects broader structural changes: China’s pivot toward cleaner energy, economic rebalancing, and slower industrial growth have prompted major producers to rethink their long-term strategies. In response, markets may start pricing in slower-than-expected growth in oil-intensive sectors, particularly in emerging economies.

US Tariffs Spark Global Economic Growth Concerns

Weighing heavily on oil prices was the announcement from President Donald Trump of a 35% tariff on Canadian imports, alongside plans to impose blanket tariffs of 15% to 20% on most U.S. trade partners. These protectionist moves are widely expected to hamper global trade, reduce manufacturing output, and ultimately erode energy demand.

Additional threats of tariffs on Brazil, copper, semiconductors, and pharmaceuticals further heightened fears of a multi-front trade war, which could constrict industrial activity and consumer confidence, key drivers of oil consumption.

Russia and the EU Add Volatility

Adding to market complexity, the European Union is reportedly preparing to introduce a floating price cap on Russian oil, as falling oil prices have rendered the previous fixed cap ineffective. This regulatory shift, part of a new EU sanctions package, could disrupt Russian export strategies and distort global supply flows, particularly in Eastern Europe and parts of Asia.

If enacted, a floating cap could tighten supply unpredictably, creating price volatility, especially if Russia retaliates with production cuts or export bans.

Oil Faces a Tenuous Path Amid Mounting Macro Risks

While oil prices have shown brief resilience, underlying fundamentals remain weak. The OPEC demand downgrade, escalating trade tensions, and geopolitical flux all point toward a fragile market vulnerable to further shocks. Unless trade negotiations stabilize or global growth shows stronger signs of revival, any recovery in oil prices may be short-lived and susceptible to reversal.

Investors will be closely monitoring upcoming macroeconomic data releases, Trump’s next tariff decisions, and OPEC+ policy meetings to gauge the medium-term trajectory for crude.

Source: Reuters

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Gerik

Economic

Canada Hit with Steep 35% Tariff Amid Growing Trade Retaliation

Late Thursday, President Trump took to Truth Social to announce a new 35% tariff on all Canadian imports, effective August 1. He accused Canada of "financial retaliation" in response to prior U.S. tariffs earlier in the year. Trump warned that any further Canadian countermeasures would result in additional duties beyond the 35% baseline. There was no clear indication on whether goods compliant with the USMCA trade agreement would be exempt under this new regime, injecting fresh uncertainty into cross-border supply chains.

This development is particularly significant for Canada, the second-largest trading partner of the United States, with bilateral trade exceeding $750 billion annually. Key sectors likely to feel the brunt include agriculture, automotive, and energy, given their heavy reliance on U.S. market access.

Global Tariff Threats Expand as Trump Floats Blanket Rates

In a separate interview with NBC News, Trump suggested that the current 10% baseline tariff applied to many U.S. trading partners could be raised to 15–20% across the board, signaling a broader protectionist shift. This would mark a sharp escalation in trade tensions, particularly affecting medium-sized exporters such as South Korea, Taiwan, and EU countries, many of which are still negotiating carve-outs or exemptions.

The implications are significant: such blanket tariffs would touch a wide range of consumer goods, raw materials, and industrial inputs, potentially driving up prices in the U.S. while straining diplomatic ties globally.

Brazil, Vietnam, and Metals Sector Also Targeted

Earlier this week, Brazil was slapped with a 50% tariff, with Trump citing political interference in the ongoing trial of ex-President Jair Bolsonaro. This move was coupled with aggressive tariff enforcement across over 20 nations, signaling a clear shift toward geopolitically motivated trade actions.

Vietnam, initially threatened with a 46% rate, secured a partial reprieve with a 20% tariff on most exports, though goods suspected of transshipment from China will still face a steep 40% duty. This nuanced enforcement approach underlines the administration’s attempt to disrupt Chinese workaround strategies while maintaining partial engagement with Southeast Asian allies.

Meanwhile, Trump confirmed that copper imports will be subjected to 50% tariffs starting in August, aligning with similar measures on steel and aluminum. He also hinted at a possible 200% tariff on pharmaceuticals, a move that, if enacted, would send shockwaves across the healthcare sector and global drug supply chains.

EU Seeks to Avoid Tariff Escalation

Despite the chaos, the European Union appears to be seeking a truce, signaling willingness to accept a 10% universal tariff on many of its exports, though Brussels is reportedly negotiating sector-specific exemptions, particularly for luxury goods, automotive parts, and green technologies.

Unsurprisingly, China responded with a veiled threat, warning that nations aligning with the U.S. to cut Beijing out of supply chains will face retaliation. This message underscores the growing bifurcation of global trade, where countries are being pushed to choose between the U.S.-led tariff bloc and a China-centric supply chain model.

This week’s developments confirm that the Trump administration is not only reviving but escalating its trade war doctrine, with a more comprehensive, punitive approach and geopolitical overtones. Investors, exporters, and policymakers worldwide now face a rapidly evolving global trade environment, with implications for inflation, supply chain resilience, and diplomatic alignment likely to dominate the second half of 2025.

As the August 1 implementation deadline looms, markets and governments alike will be watching for any signs of negotiation or further escalation.

Source: Reuters

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Edward Lawson

Oil steadied after falling more than 2% on Thursday as investors weighed the fallout from OPEC+ supply and President Donald Trump’s tariffs.

West Texas Intermediate was near $67 a barrel and Brent closed below $69 in the previous session. OPEC+ is discussing a pause to production increases after a hike tentatively planned for September, according to delegates, which would unwind its most recent output cuts a year earlier than expected.

Even before the latest supply boost announced over the weekend, there had been concerns about a looming glut toward the end of the year. Still, there are signs of tightness in the physical market, and demand typically peaks during the Northern Hemisphere summer.

Oil is little changed for the week, despite OPEC+ announcing a further increase to production in August, escalating hostilities against shipping in the Red Sea and a wave of tariff threats from Trump. There are concerns that his levies and retaliatory measures will impact global economic growth.

To get Bloomberg’s Energy Daily newsletter in your inbox, click here.

Source: Bloomberg Europe

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Liam Peterson

Gold steadied after a two-day climb as traders focused on tariff threats from President Donald Trump and the outlook for US monetary policy.

Bullion traded above $3,332 an ounce, after posting modest gains on Wednesday and Thursday that pared a weekly drop. The president proposed a slew of country-specific tariffs this week, including moves against Canada and Brazil, while pushing the overall deadline for implementation to Aug. 1. In addition, he’s planning a substantial levy on imports of copper.

Elsewhere, investors were considering the outlook for US interest rates. Policymakers have held borrowing costs steady this year, though a divide has emerged over how many rate cuts officials expect this half. Fed Bank of San Francisco President Mary Daly said she still views two reductions as likely, with a greater chance that the price effects from tariffs may be more muted than anticipated. Lower borrowing costs tend to benefit bullion.

Gold has rallied more than a quarter this year, setting a record above $3,500 an ounce in April. Trump’s erratic efforts to overhaul trade policies continue to serve as a steady source of uncertainty for markets, driving demand for havens amid worries about the long-term impact on the global economy. Theadvance has also been aided by heightened geopolitical tensions and central-bank buying.

Spot gold was 0.3% higher at $3,332.31 an ounce at 8:32 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver and palladium rose, while platinum fell.

Source: Bloomberg Europe

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Alexander

U.S. stock index futures fell on Thursday evening after President Donald Trump said Canada will face 35% trade tariffs from next month, ramping up concerns over the impact of his tariff agenda.

Futures reversed course after rising earlier following a record-high close on Wall Street, as technology stocks advanced.

S&P 500 Futures fell 0.5% to 6,290.75 points, while Nasdaq 100 Futures fell 0.6% to 22,877.0 points by 20:28 ET (00:28 GMT). Dow Jones Futures fell 0.5% to 44,676.0 points.

Trump announces 35% tariff on Canada, warns against retaliation

Trump on Thursday evening released a letter outlining a 35% trade tariff against Canada, effective from August 1. The new duties will be in addition to Trump’s recent sectoral tariffs.

Trump said the levy was in part aimed at pressuring Ottawa into stemming the illegal flow of fentanyl across its border and into the United States. The president also alleged unfair trade practices by Canada, in that Ottawa already had extremely high tariffs against several U.S. companies and sectors.

The tariffs will take effect from August 1, when a host of Trump’s other trade levies are set to take hold. The president released a slew of letters this week outlining tariffs against several major economies, including a 25% tariff each on South Korea and Japan, and a 50% tariff on Brazil.

Still, his tariffs announcements so far garnered limited negative reaction in markets, as investors doubted whether Trump’s tariffs will ever be fully imposed. The president has in several instances either postponed his tariff imposition or backed off from imposing the worst of his planned levies.

Wall St at record highs on tech gains

Technology stocks were a major driver of Wall Street’s recent rally, with investors piling into chipmakers on heightened optimism over artificial intelligence demand.

Some speculation over interest rate cuts by the Federal Reserve also buoyed U.S. stocks, although the central bank gave no clear clues as to when rates will be cut next.

Sentiment was cheered by market darling Nvidia (NASDAQ:NVDA) closing above a $4 trillion valuation for the first time ever, strengthening its spot as the world’s most valuable listed company. Gains in Nvidia also spilled over into broader markets.

But despite recent highs, Wall Street’s pace of gains appeared to be slowing, opening the door for some pullback, especially ahead of the second-quarter earnings season.

The S&P 500 rose 0.3% to 6,280.39 points, while the NASDAQ Composite rose 0.1% to 20,630.67 points on Thursday. The Dow Jones Industrial Average rose 0.4% to 44,650.70 points.

The second quarter earnings season will begin in earnest next week, with a host of major banks, including JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup Inc (NYSE:C), and Bank of New York Mellon (NYSE:BK) set to report on Tuesday.

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Manuel

Commodity

Political

US regulatory actions to ensure oil and gas pipeline safety have plummeted to a record low for the start of a presidential administration as Donald Trump pushes to streamline the government and cut red tape.

The Pipeline and Hazardous Materials Safety Administration opened 40 enforcement cases between January 20 and the end of June, according to filings from the regulator. That’s the least for the beginning of any presidential term in data going back two decades and a 68% slide compared with Trump’s first months in office eight years ago.

The drop-off in enforcement comes as the White House backs fossil fuels in pursuit of “energy dominance” and moves to reverse regulations imposed by former President Joe Biden, arguing that they burden companies with unnecessary costs. It also coincides with an exodus of senior officials from PHMSA earlier this year amid a move to shrink the federal government.

PHMSA said the slowdown occurred because it was in the midst of issuing two revisions to its pipeline safety enforcement process. The changes, which took effect in May, concerned how the agency calculates civil penalties and discloses records.

“We didn’t want to be issuing new cases while we knew that those pretty significant changes to our process were underway,” Emily Wong, PHMSA’s director for governmental, international and public affairs, said in an interview.

Still, the agency has opened just five enforcement cases since early June, well below the monthly average of around 17, the data going back to 2002 show. PHMSA typically initiates cases when pipeline companies violate federal regulations, or to require steps to prevent future leaks or explosions. Its responses range from warning letters to orders requiring measures from operators. Oil and Gas Pipeline Safety Cases Plunge in First Months of Trump’s Second Term_1

Oil and Gas Pipeline Safety Cases Plunge in First Months of Trump’s Second Term_1

While it’s not unusual for enforcement activity to fall during the transition to a new presidential term, the drop in the first months of the Trump administration was steeper than usual. The low number of cases has stoked concern that a decline in oversight will lead to a ramp-up in pipeline accidents and their severity, putting people living near the conduits at heightened risk and allowing companies to evade accountability for repeat offenses.

Yvette Taylor, chair of the board of supervisors in Upper Makefield Township, Pennsylvania, is among those calling for stronger enforcement in her community. In late January, a leak was discovered on an Energy Transfer LP jet-fuel pipeline running through the town. The company later confirmed that the fuel had contaminated seven private water wells.

Yet several months later, Energy Transfer still hasn’t performed a full remediation of the site, state lawmakers Steven Santarsiero and Perry Warren wrote in a letter to Pennsylvania Department of Environmental Protection in June. Taylor says PHMSA should have ordered the company to shut the pipeline down completely.

“The Township and elected officials requested that the pipeline be shut down and the only response to date is to reduce the flow, which does not address the potential for future leaks,” she said. “We believe that as long as product is flowing through the pipeline, a leak can occur.”

Energy Transfer continues to conduct water tests, install advanced filtration water systems at no costs to residents and work with state, federal and local authorities to address the situation, a company spokesperson said in an email.

“Our work to remediate all impacted areas is ongoing as we are committed to the full cleanup and restoration” of the neighborhood affected, the spokesperson said.

Wong said PHMSA took “very swift and very firm corrective action” in addressing the incident in Upper Makefield, as well as an April spill from South Bow Corp.’s Keystone oil pipeline in North Dakota.

“Regarding Upper Makefield, PHMSA has made clear to the board of supervisors and the community in multiple public forums that we cannot shut down a pipeline without evidence it is hazardous to life, property, or the environment,” Wong said in an email.

“Our investigation is ongoing, but we have seen no evidence that suggests the Twin Oaks pipeline is still leaking or that there is cause for us to shut down the pipeline,” she added.

But some observers remain skeptical. If pipeline operators sense that there’s no one policing the industry, safety lapses could proliferate, said Bill Caram, executive director of the watchdog group Pipeline Safety Trust.

“I certainly worry that we’re going to see an increase in the amount of failures that happen and the severity of the failures that happen,” Caram said.