China’s crude oil imports fell 8.7% in May compared to a year earlier, reaching 46.97 million metric tons or around 11.06 million barrels per day (bpd). This decrease can be attributed to refiners scaling back purchases amid heavy plant overhauls, subdued profit margins, and weak demand for refined oil products.
The lower imports were driven by large state-run refineries, such as Sinopec’s Zhenhai and Zhanjiang plants, and PetroChina’s Dushanzi and Dalian facilities, undergoing regular maintenance. Additionally, weak gasoline and diesel demand, especially a decline in domestic diesel demand due to the increased penetration of LNG trucks, contributed to the pressured refinery runs.
Smaller independent refiners in the eastern Shandong province also cut production as higher crude costs squeezed their profit margins, with some processing more lower-priced fuel oil instead. Shandong-based independents operated at an average of 55.5% of capacity in May, down from 62.2% a year earlier.
The lower refinery demand has led to a buildup in China’s onshore above-ground crude oil inventories, which reached the highest level since the end of last year, at 946 million barrels, according to Vortexa Analytics.
However, the analysts at ANZ expect crude oil imports to rise again in June and into the third quarter, as improving refinery margins should drive increased purchasing activity. For the January-May period, China’s crude oil imports totaled 229.03 million metric tons, or about 11 million bpd, down 1.2% from the same period in 2023.
In contrast, China’s natural gas imports in May increased by 6.5% year-over-year to 11.33 million tons, bringing the year-to-date volumes to 54.28 million tons, or 17.4% higher than the previous year.
China’s exports of refined oil products, including diesel, gasoline, aviation fuel, and marine fuel, grew 9.49% from a year earlier to 5.35 million tons in May, driven by higher refined oil product inventories and new government export quotas released in early May, which enabled refiners to capitalize on stronger bunkering demand for aviation fuel.