Crude oil imports into China fell by 5.4 percent last year on an annual basis for the first time in two decades, Reuters reported citing statistical data from Beijing.
According to the report, the cause of the decline was Beijing’s push to reduce fuel oversupply but targeting independent refiners with various measures aimed at curbing their appetite for oil.
The government also clamped down on the independent refining sector for environmental law violations, tax code violations, and illegal import quota trading.
Still, while overall imports of crude last year fell, imports from sanctioned Venezuela and Iran actually increased, according to data from Kpler cited by Bloomberg earlier this week.
These exports increased by 53 percent, with the total reaching 324 million barrels of Venezuelan and Iranian crude—the highest since 2018, the Bloomberg report noted.
Total 2021 oil imports in China stood at 512.98 million tons, which came in at about 10.3 million barrels daily. This was down from 542.39 million tons during the previous year when Chinese refiners were gobbling up as much cheap oil as they could.
China has been the biggest oil importer in the world for seven years now, ever since it began allocating import quotas to private refiners in 2015. Since then, the country has accounted for as much as 44 percent of the global oil import growth and has become a major factor for oil price movements. Over the same period, the annual growth in import rates for China has averaged a solid 10 percent.
This lead role of China in the oil markets has made them vulnerable to any shocks in the country. Right now, the potential for such shocks is considerable. As Simon Watkins wrote in a recent article for Oilprice, a growing debt bubble and slowing economic growth present a twin danger for the Chinese economy that will have immediate and potentially serious repercussions across the global oil market.
By Irina Slav for Oilprice.com
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