China’s oil refinery output in July fell by 6.1% year-on-year, reaching its lowest level since October 2022, as thin processing margins and weak fuel demand discouraged production. According to data from the National Bureau of Statistics (NBS), refiners processed 59.06 million metric tons of crude oil in July, equivalent to 13.91 million barrels per day (bpd), down from 14.19 million bpd in June and 14.87 million bpd in July 2023.
For the first seven months of the year, total output was 419.15 million tons, translating to an average of 14.37 million bpd, which is a 1.2% decline compared to the same period last year. This marks the second consecutive month of declining year-to-date volumes.
Despite a seasonal uptick in travel during the summer holidays, gasoline demand remained subdued as consumers opted for international travel or high-speed rail over driving. JLC, a consultancy, estimated a 3.3% increase in July’s apparent gasoline consumption compared to June, but this growth rate was significantly slower than the previous year.
The rise of electric vehicles in China has also contributed to reduced gasoline usage, with half of all vehicles sold in July being either new pure electric or plug-in hybrids. Additionally, planned overhauls at major refineries limited production capacities, while independent refineries operated at just 56.11% of capacity, a decrease of 7.3 percentage points from the previous year.
On a positive note, China’s crude oil production rose by 3.4% in July to 17.9 million tons (approximately 4.22 million bpd), with year-to-date production up 2.1% to 124.96 million tons (4.28 million bpd). Natural gas production also showed robust growth, increasing by 7.9% year-on-year to 20 billion cubic meters.