China is expected to import its highest volumes of crude oil since August this month, driven by a significant drop in oil prices earlier in September. This decline in prices came as concerns over global demand, especially from China, pushed crude prices lower, with Brent Crude falling below $70 per barrel on September 10.
According to data from LSEG Oil Research and commodity analysts Kpler, the world’s largest crude importer is projected to bring in about 11.4 million barrels per day (bpd) in November. If these estimates hold, this would mark the highest imports since August, when China imported 11.56 million bpd.
The surge in November imports is largely attributed to the drop in oil prices during the first half of September. Demand concerns, particularly regarding Chinese consumption, led to lower international crude prices. However, despite this uptick in imports, there are still no clear signs of a strong recovery in Chinese oil demand. The country’s oil consumption has remained below expectations for much of the year.
October imports, for instance, showed a continued decline in crude arrivals compared to the same months in 2023. Official data from China’s General Administration of Customs revealed that China imported 10.53 million bpd of crude in October, which is 9% lower than the same month last year and 2% below September’s imports of 11.07 million bpd.
This drop in imports has been linked to reduced refinery capacity at PetroChina and ongoing weak demand from China’s independent refiners, also known as “teapots.” These refiners, highly sensitive to profit margins, have been cutting back on production in response to low margins and lackluster demand.
Additionally, China’s overall refining output has continued to struggle. Refinery run rates fell for the seventh consecutive month in October, dropping 4.6% from the previous year, according to data from the country’s statistics agency. This indicates that even as crude oil imports rise, refining activity is still facing significant challenges.
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