The Chinese reopening and new refineries coming online are set to raise the crude oil imports in the world’s top importer to a record-high this year, industry consultants told Reuters.
Chinese crude oil imports could increase to average as high as 11.8 million barrels per day (bpd) this year, rising by between 500,000 bpd and 1 million bpd, according to Energy Aspects, FGE, S&P Global Commodity Insights, and Wood Mackenzie.
This would reverse the decline of 2021 and 2022 and beat the record of an average 10.8 million bpd in yearly crude oil imports from 2020.
The Chinese reopening will drive a jump in gasoline and jet fuel demand, while diesel demand is also expected to rise due to economic growth and infrastructure construction growth, according to analysts from the four consultancies briefed by Reuters.
Moreover, Chinese refineries are raising utilization rates due to lower-cost crude and a surge in demand after the reopening, a state oil official told Reuters.
China will also see this year the start-up of two new refineries with a combined capacity to process 520,000 bpd of crude, which should also drive imports higher.
Uncertainties over the fuel export quotas going forward is a factor clouding the outlook, according to the analysts.
Global oil demand is set to increase by 2 million bpd this year, pushed up by growth in Chinese consumption after the reopening, the International Energy Agency (IEA) said this week as it raised its 2023 demand growth estimate by 100,000 bpd from last month’s forecast.
China’s resurgent oil demand – with growth seen at 900,000 bpd this year – and the rest of the Asia-Pacific region will dominate global growth, the IEA said in its closely-watched Oil Market Report on Wednesday.
“China accounts for nearly half the 2 mb/d projected increase this year, with neighbouring countries also set to benefit after Beijing ditched its zero-Covid policies,” the IEA.
By Charles Kennedy for Oilprice.com
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China’s own demand in 2023 is projected to hit 17.1 mbd necessitating an import of 13.2 mbd. China will account for 50% of global demand growth or 1.15 mbd.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert