China’s oil demand is expected to fall by 600,000 barrels a day in 2026 due to the US-Iran war and the spread of electric vehicles, according to the research arm of Sinopec Group, the top state-owned refiner.

“We were actually expecting a 300,000 to 500,000 barrel-a-day of growth for this year’s demand, but currently, after the war, you see China’s oil demand shrank very quickly,” Fairy Wang, vice president at the Sinopec Economics & Development Research Institute, said at an industry event in Singapore.

The revised outlook contrasts with the institute’s prior expectation that demand would grow this year. Sinopec Group is China’s top state-owned refiner.