China saw a significant increase in crude oil imports in August, reaching their highest monthly volume in a year. The rise in imports came as international oil prices fell, leading to more favorable purchasing conditions for Chinese buyers.
In August, China imported 11.56 million barrels per day (bpd) of crude oil, the highest level since August 2023. This marked a substantial rebound from July’s lower figure of 9.97 million bpd, according to official Chinese data reported by Reuters columnist Clyde Russell. July’s crude oil imports had been the lowest in two years, but August’s figures were still 7% below the same month last year.
From January to August 2024, Chinese crude oil imports declined by 3.1% compared to the same period in 2023.
The August data does not clearly answer whether the increase in imports signifies higher demand or reflects China’s strategy to secure larger volumes when oil prices are low. It is likely that the imports for August were contracted in May and June, when international crude oil prices were decreasing, as noted by Reuters’s Russell.
Brent crude prices fell in May and June from a peak of over $90 per barrel in early to mid-April, which was the highest price of the year so far.
The uptick in imports for August might be partly due to seasonal demand, as importers typically increase their purchases in the third quarter to build up reserves for peak winter demand. However, lower oil prices also likely contributed to the rise in imports.
China’s tendency to stock up on commodities when prices are lower could explain the higher import volumes, even as economic growth has underperformed expectations. Weaker-than-expected oil demand in China suggests that lower international prices might have played a significant role in the country’s August oil purchases.