Lower domestic production and continued low oil prices will lead to China's demand for crude oil imports rising by around 400,000 bpd in 2017, according to a senior manager at Sinopec.
Chinese crude oil imports are expected to exceed 400 million tons this year, and to further rise next year, Zhang Haichao, vice president of Sinopec Group, told Reuters on Tuesday.
The estimate provided by Zhang means that Chinese demand for foreign crude would rise by 400,000 bpd, and for the first time ever, rising imports could make China the world's top crude oil importer on an annual basis, according to Reuters.
Chinese customs data has revealed that the world's second-largest consumer of crude oil imported 8.55 million bpd during the first half of the year, or 212 million tons in total - a 13.8-percent annual increase. The growth in imports comes on the back of higher refinery runs after a maintenance period, as well as dwindling local crude production.
The estimates of the Sinopec executive for the increased full-year 2017 imports come despite reports that Chinese refineries are expected to shut nearly 10 percent of the country's 15.1-million-bpd refinery capacity in the third quarter-the peak demand season, as they continue to grapple with domestic surplus of gasoline and diesel.
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But last month, China allowed a second batch of crude oil import quotas for independent refiners and some state-held companies for 2017, setting full-year quotas at a total of 91.73 million tons, or 1.83 million bpd.
At the beginning of this year, analysts predicted in a Platts outlook for 2017 that at an average barrel price of US$55 this year, Chinese crude oil production would continue to drop, by around 5 percent compared to last year. Declining domestic output would raise Chinese crude oil imports in 2017 compared with 2016, analysts said.
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. More