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Thanks to demand from the start-up of major refineries, Chinese crude oil imports in June have increased since May, and has increased by 15.2 percent from June last year, customs data compiled by Reuters showed on Friday.
China’s crude oil imports in June averaged 9.63 million bpd, an increase of 1.7 percent from an average of 9.47 million bpd in imports in May, and a 15.2-percent increase from 8.36 million bpd in June last year, according to Reuters calculations in barrels from data in tons provided by the Chinese General Administration of Customs.
Despite weaker refining margins and a glut of refined oil products, demand for crude in China increased last month thanks to Hengli Petrochemical, which had a new refinery start up earlier this year and ramped up to full 400,000-bpd capacity at the end of May. Another 400,000-bpd refinery, of Zhejiang Petrochemical, began trial runs, further pushing demand for crude.
China’s June crude oil imports increased from May, but were off their record in April, when China hit a new monthly record of 10.64 million bpd in crude imports as refiners rushed to stock up on Iranian oil before the U.S. removed the sanction waivers.
Then, China’s crude oil imports dropped in May from the monthly record in April, as Chinese refiners drastically reduced Iranian oil imports after the end of the U.S. waivers and as some state refineries were offline for planned maintenance.
According to Chinese customs data and Reuters estimates, crude oil imports in the first half of 2019 averaged around 9.87 million bpd, which is an 8.8-percent increase in import volumes compared to the first half of 2018.
However, China’s crude oil demand, and possibly imports, could be dragged down in the short term by signs of wobbling economy and refiners curtailing refinery runs in the third quarter as massive refinery start-ups and slowing domestic fuel demand have created a fuel glut in the country, hurting refining margins.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
The second fact is that China’s oil imports are continuing to grow at an average annualized rate of 5.3%. Imports averaged 9.87 million barrels a day (mbd) during the first half of 2019. This is 5.8% higher than 2018. Moreover, they are projected to hit 11 mbd this year. These are not signs of a faltering economy or oil demand.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London