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China imported an estimated 9.2 million bpd of crude oil last month, according to calculations by energy analytics provider OilX, which was some 1.6 million bpd lower than imports for May.
On an annual basis, OilX analysts noted, the June average would be about 1 million bpd lower than what China imported in crude oil n June 2021. They noted, however, that despite the recent series of lockdowns because of Covid flare-ups, China’s oil imports were remarkably stable over the past few months.
This month, the analysts reported, loadings for China are on the rise, and so is floating storage off its coast. Oil in storage is now at 14 million barrels, the team reported.
In terms of import sources, China’s intake of Saudi oil declined sharply in June, by more than 800,000 bpd, while imports from Brazil increased by close to 200,000 bpd. Imports from Russia were also higher, but more modestly than imports from Brazil.
Earlier this month, Reuters cited tanker tracking data as showing China had continued buying Russian crude strongly while reducing its intake of Saudi oil, despite lockdowns. In fact, according to that data, Russia was China’s largest oil supplier in June, as it was in May.
Analysts expect Russian oil exports to China to have averaged some 2 million bpd last month, accounting for 15 percent of the country’s demand.
China issued crude oil import quotas for 52.7 million tons last month for its independent refiners, which are among the biggest buyers of discounted Russian crude.
The Covid lockdowns have been a major deterrent for oil prices over the past few weeks, but the latest data released by OilX suggests that despite a decline on an annual basis, China continues buying oil strongly, which would likely support prices. This would leave recession fears as the only bearish factor in the market right now, at least for a while.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
A decline of imports in one month is statistically irrelevant. What matters is average daily imports in 2022 and indications are pointing to a surge of Chinese crude imports particularly from Russia.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London