Higher international oil prices and China’s crackdown on illicit import quota trade led to the lowest Chinese crude oil imports in three years in October.
China imported 8.9 million barrels per day (bpd) of crude last month, down from 9.99 million bpd in September 2021 and from 10 million in October last year, official customs data cited by Reuters showed this weekend.
The rally in crude oil prices, the limited import quotas for independent refiners, the so-called teapots, and the government crackdown on the illegal trade of crude import quotas dragged October 2021 crude imports to the lowest level since September 2018, according to Reuters estimates based on data from the Chinese General Administration of Customs.
China’s crude oil imports averaged 10.21 million bpd between January and October 2021, down by 7.2 percent compared to the same period of last year, when oil prices were significantly lower than $80 a barrel.
Last month, China was said to have cut once again the crude oil import quotas for independent refiners for the rest of the year in the latest move to curb their growing oil market clout.
Apart from rallying crude oil prices, Beijing’s crackdown on the private refining industry was another reason behind the import decline so far this year, as the government tackled excessive fuel supply, much of which came from teapots. Allegations of environmental law violations and tax evasion were also leveled against some independent refiners. Additionally, Beijing has ordered state-owned refiners to stop trading their import quotas with private peers.
Going forward, Chinese crude oil imports in November could be higher because refiners have been asked to help with the diesel shortage in the country. Officials at the National Development and Reform Commission (NDRC), China’s planning body, reportedly asked refiners in a meeting last month whether they would be able to import more diesel, produce more fuel, or purchase crude oil at reasonable prices.
By Tsvetana Paraskova for Oilprice.com
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