China’s obsession with SUVs is about to have a big effect on the outlook for crude oil

China’s demand for crude oil is on track to continue rising for the next decade, amid an expected doubling of registered vehicles on the road and a preference among new car buyers for sport utility vehicles [SUVs] over smaller petrol cars and electric options, according to analysts.

The appeal of beefier, petrol-powered SUVs, perceived as symbols of wealth and status, means that there’s little hope China will be able to cut its reliance on crude oil imports, in spite of efforts to promote greener cars.

“While electric vehicles represent an existential threat to long term oil demand, their impact will be marginal over the next decade,” said senior analyst Neil Beveridge, the lead-author of a recent report by US brokerage Sanford Bernstein.

“We believe demand worries from electric vehicles are overdone while continuing demand for sport utility vehicles (SUVs) in emerging markets will drive oil demand higher over the next decade.”

He forecast that petrol demand growth in China to be the “single most important” factor supporting global crude oil demand growth in the next decade.