China’s imports of crude oil slumped by 11% in June from a record-high in the same month of 2023, amid tepid fuel demand and lower run rates at independent refiners.
In the first half of 2024, crude arrivals also dropped, by 2.3% compared to the first half of last year, according to data from China’s General Administration of Customs cited by Reuters on Friday.
Last month, crude imports in the world’s largest oil importer stood at 46.45 million metric tons, or around 11.3 million barrels per day (bpd). While this was slightly higher than the imports in May of 11.06 million bpd, they were 1.3 million bpd below the all-time high import volume of 12.67 million bpd set in June 2023, the data showed.
The property crisis in China and weaker-than-expected fuel demand have weighed on refining margins in recent months, which has prompted independent Chinese refiners to reduce crude throughput.
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China accelerated the pace of stockpiling crude oil inventories in May amid lower refining throughput and weaker crude imports compared to last year, in further bearish signs about China’s apparent oil demand so far this year.
China has likely added 1.08 million bpd of crude to its commercial or strategic inventories in May, up from 830,000 bpd going to stockpiles in April, according to estimates by Reuters columnist Clyde Russell based on official Chinese data.
In its monthly report on Thursday, the International Energy Agency (IEA) said that underwhelming Chinese consumption is slowing down growth in global oil demand.
“Oil consumption in China, long the engine of global oil demand growth, contracted in both April and May, and is now assessed marginally below year earlier levels in 2Q24,” the Paris-based agency said, adding that Chinese demand for industrial fuels and petrochemical feedstocks was particularly weak.
Going forward, Chinese oil imports could rebound as the authorities have asked state oil companies to add almost 60 million barrels of crude oil to emergency stockpiles to boost supply security.
By Tsvetana Paraskova for Oilprice.com