According to data from the General Administration of Customs released on August 7, China’s crude oil imports remained poor in July, rising just 0.9% to 8.83 million b/d from the 47-month low in June amid destocking activities and a delayed recovery in domestic demand.
Increased inflows
The increase in inflows in July was contributed by independent refineries which lifted their crude imports by 25.4% to 3.16 million b/d, from 2.52 million b/d in June, according to S&P Global Commodity Insights data.
Meanwhile, their state-owned peers are more likely to continue reducing spot purchases to consume their stocks.
According to Kpler shipping data, China’s crude stocks stood at an 11-month high of 945 million barrels in May, accounting for 63% of the country’s crude storage capacity that Kpler monitors.
“The destocking activity will last until September when peak oil demand season finally starts,” a London-based analyst said.
“So, we expect China’s crude imports are unlikely to see a notable rebound until then.”
Peak consumption
Typically, China’s peak oil product consumption occurs over September and October during the Mid Autumn Festival and the week-long National Day holidays, boosting gasoline and jet fuel demand for travel purposes.
Autumn is also the season for harvesting, fishing and construction activities that drive gasoil demand.
The GAC releases data in metric tons, which S&P Global converts to barrels using a 7.33 conversion factor.
In the first seven months of the year, China’s crude imports slipped 4% year on year to 289.84 million mt, or 10.02 million b/d, the data showed.
China’s crude oil imports in H2 will feel the pressure of bulging domestic inventories, an uncertain demand recovery and oil product export restrictions — factors that could dim the chances of any robust growth in feedstock inflows.
Exports up 6% from a 5-year low
Oil product exports in July recovered 6.4% to 3.41 million mt from the five-year low of 3.21 million mt in June, the GAC data showed.
China’s oil product exports are expected to increase in August, as strong export margins are likely to raise its gasoil outflows to hit 1 million mt, a one-year high, according to industry analysts and refinery sources with knowledge of the matter.
And better to export now rather than later because product cracks are narrowing recently.”
The breakdown by products will be released on Aug. 20.
China has also cut its oil product imports in the first seven months of the year to 13.21 million mt, down 12.1% year on year.
As a result, net exports dropped 54.6% during the period.
CHINA’S PRELIMINARY OIL TRADE DATA (million mt):
| Jul-22 | Jul-21 | Change | Jun-22 | Change | |
| Crude imports | 37.33 | 41.24 | -9.5% | 35.82 | 4.2% |
| Oil product imports | 1.63 | 2.52 | -35.6% | 1.64 | -0.9% |
| Oil product exports | 3.41 | 4.64 | -26.5% | 3.21 | 6.4% |
| Net oil prod exports | 1.78 | 2.11 | -15.5% | 1.57 | 13.9% |
| Jan-Jul 2022 | Jan-Jul 2021 | Change | |
| Crude imports | 289.84 | 301.79 | -4.0% |
| Oil product imports | 13.21 | 15.03 | -12.1% |
| Oil product exports | 25.04 | 41.08 | -39.0% |
| Net oil prod exports | 11.83 | 26.04 | -54.6% |
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Source: S&P Global
