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After a pandemic-hit slow start to 2020, China’s refiners boosted production from April, thanks to ultra-low crude oil prices and a rebound in the Chinese economy and fuel demand, setting a new record for crude oil processing volumes.
Crude oil throughput at China’s refineries averaged 674.41 million tons, or 13.51 million barrels per day (bpd), in 2020, a 3.2-percent increase over the previous year to a record-high processing volume, according to data from the National Bureau of Statistics cited by Argus.
Last year, when international crude oil prices sank in March, April, and most of May, Chinese refiners took advantage of the lowest prices in years and stocked up on low-priced crude. For several months, China was smashing crude oil import records through the summer, and tankers had to wait for weeks to discharge the crude as port congestion was growing.
Several new refining units also contributed to China’s record-high crude processing rates in 2020, as did the higher import quotas given to independent refiners—the so-called teapots—by the government.
According to data from China’s bureau of statistics cited by Argus, Chinese refiners reduced crude oil throughputs between January and March, with the March output down by 6.6 percent year on year. In April, however, refiners began to ramp up crude oil processing, which hit a daily record in November—at 14.2 million bpd, up by 3.2 percent compared to November 2019. The average refinery throughput in December was only a bit lower—at 14.18 million bpd, it stayed close to the record levels of November, according to Argus estimates.
China’s crude oil imports also rose to a record high of 10.85 million bpd on average in 2020, up by 7.3 percent, due to the cheap crude prices and the start-up of several refineries.
For most of last year, the solid demand in China single-handedly supported the oil market, while demand in Europe and the United States was waning with resurging COVID-19 cases.
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.