In a notable shift, China’s oil refinery throughput in 2024 experienced its first decline in over two decades, excluding the pandemic-impacted year of 2022. This downturn is attributed to stagnant fuel demand and depressed refining margins, as reported by the National Bureau of Statistics on Friday.
Key Highlights:
Throughput Statistics:
The refining industry processed 1.6% less crude oil in 2024, totaling 708.43 million metric tons (approximately 14.13 million barrels per day), down from the record 14.7 million bpd in 2023.
Factors Influencing Decline:
The rise of electric vehicles has significantly eroded gasoline demand.
A prolonged property crisis and sluggish merchandise exports have dampened diesel fuel consumption.
Analyst Mia Geng from consultancy FGE noted that low margins have led to a decrease in gasoline and diesel exports, impacting refinery operations.
Capacity Utilization:
Year-on-year declines in throughput were recorded from April to October, with independent plants in Shandong operating at only 54% of processing capacity, one of the lowest rates since 2016.
Impact on Independent Plants:
Many independent refineries operated at a loss, leading to extended shutdowns despite processing discounted crude from Iran and Russia.
Permanent closures at PetroChina Dalian and indefinite shutdowns at three state-run Sinochem refineries contributed to the overall decline.
December Data:
For December, throughput saw a slight increase of 0.6% year-on-year, reaching 59.35 million tons (or 13.98 million bpd).
Domestic Crude Production:
China’s domestic crude oil production rose by 1.8% in 2024, totaling 212.82 million tons (approximately 4.24 million bpd), nearing the all-time high of 4.3 million bpd recorded in 2015.
Natural Gas Production:
Natural gas output expanded by 6.2% last year, reaching a record 246.4 billion cubic meters, driven by increased production from the Sichuan onshore basin and offshore reservoirs in the South China Sea.