Global refining margins are dismal as global oil demand growth remains below average due to sluggish economic activity in China, BP CEO Murray Auchincloss said.

“Global oil demand is a little bit below average growth in 2024 and 2025, and that’s China,” Auchincloss told Reuters.

Demand will return to normal growth rates after Chinese President Xi Jiping introduces new stimulus measures to the economy, he said.

The International Energy Agency and other bodies have repeatedly trimmed the oil demand outlook for China in recent months. The IEA earlier this month said that the rapid growth in electric vehicle sales in China was “wrong-footing oil producers”.

“Refining margins are dismal right now. The third quarter was a tough quarter and the start of the fourth quarter is pretty bad as well,” Auchincloss said after BP reported a 30% annual drop in profit in the third quarter.

Global oil storage levels are currently at a low level so supply outages or extreme weather events could lead to higher volatility, he said.
Source: Reuters (Reporting by Ron Bousso; editing by Jason Neely and Emelia Sithole-Matarise)