China’s daily crude oil imports surged to their highest level in a year last month, reaching 11.56 million barrels per day (bpd), according to customs data. This increase reflects a recovery in shipments driven by lower crude oil prices and improving refining margins. Total crude shipments for August amounted to 49.10 million metric tons, a 7% decline year-on-year, but a notable increase from July’s 42.34 million tons, which was the lowest since September 2022.
Independent refinery operations have risen for six consecutive weeks since late July, correlating with declining crude prices. State-owned refinery activity has also shown a mild upward trend despite the onset of the autumn maintenance season in late August.
Brent crude prices have dropped over 17% since early July amid concerns about weak demand in China. Analysts from Goldman Sachs noted that China’s annual oil demand growth has slowed significantly, dropping from around 500,000-600,000 bpd in the five years prior to the COVID-19 pandemic to just 200,000 bpd currently.
Looking ahead, forecasts indicate that the seasonal increase in refinery runs for September and October will not match last year’s levels due to weak road fuel transport demand, partly attributed to a shift towards greener alternatives. The increasing adoption of liquefied natural gas (LNG) in trucks is expected to displace approximately 110,000-140,000 bpd of diesel in 2024 and 2025.
For the January-August period, China’s crude oil imports fell by 3.1% year-on-year, totaling 367 million tons.