After falling to a 2021 low in June, crude oil imports to China began to recover last month as refineries exited maintenance season.
Average daily imports stood at 10.07 million bpd, or, according to Reuters, 41.24 million barrels for the month in total. Yet this was still lower than the rate of imports a year earlier: in July 2020, China bought 51.29 million tons of crude.
Yet the July number was a distinct improvement on June, when imports averaged 9.77 million bpd, or a total 40.14 million tons.
Over the first half of the year, Chinese oil imports fell by 3 percent on the year, and the outlooks are mixed.
Analysts-including Rystad Energy, Energy Aspects, and Independent Commodity Intelligence Services (ICIS)-estimate that the recent clampdown on the import and tax practices of independent refiners, as well as the significantly higher oil prices this year, could result in flat or only slightly higher crude oil imports in China in 2021.
Oil imports could grow by up to 2 percent in 2021 compared to 2020, which would be the lowest growth rate in two decades and much lower than the 9.7-percent average import growth rate since 2015, according to Reuters.
On the other hand, we could see a decline, too, as pressure on independents intensifies and parts of the country lock down because of the resurgence of Covid-19. Also, according to satellite data cited by energy analytics firm OilX earlier this year, China seems to have plenty of oil in storage.
According to the latest reports, China is canceling flights, 46 cities have warned their citizens not to travel, and local authorities have imposed curbs on public transport and taxis, all of which will inevitably hit fuel demand.
"While the number of cases (in China) is low, it comes just as the summer travel season peaks," commodity analysts from ANZ said in a note, as quoted by Reuters. "This has overshadowed signs of strong demand elsewhere."
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. More
Comments
2021 will prove no different. China’s crude oil imports are already 2% higher than 2020 in the first half of the year meaning that on average China has been importing 11.9 mbd. I am sure that imports will average higher than 12.0 mbd by 2021 particularly with the end of refinery maintenance season.
The proof is that China’s refineries broke records and averaged 15.13 mbd—up by 10.7% from a year earlier. This always translates into rising volumes of crude oil imports.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London