China’s crude oil imports reached a two-year high in November 2023, with the country importing an average of 12.38 million barrels per day. This figure represents a 4.88% increase compared to the same month last year and is the highest import rate since August 2023, according to government data reported by Reuters. The increase marks a significant uptick of 5.24% from October’s imports, contributing to a total of 521.87 million tons imported between January and November—an increase of 3.2% year-on-year.
In November, imports from Russia decreased by 157,000 barrels daily to an average of 1.19 million barrels per day. Conversely, Saudi Arabia expanded its shipments to China, raising its exports by 345,000 barrels daily to a total of 1.59 million barrels daily, making it the largest supplier for the month. Iran also saw a notable increase, adding 233,000 barrels daily from October to reach an average of 1.35 million barrels per day.
Market Dynamics and Future Outlook
According to Emma Li, head of China analysis at Vortexa, the increase in oil imports is influenced by several factors. “Domestic demand has experienced a seasonal decline, but sanctions on crude supplies from Iran and Russia have led to significant price reductions for feedstock,” she stated. This scenario has improved refining margins, prompting more refineries to seek advance import quotas ahead of the first batch scheduled for 2026.
Despite these developments, experts predict that demand for crude in China, the world’s largest oil importer, is likely to remain subdued until at least mid-2024. The Economics and Technology Research Institute of CNPC noted that while stronger-than-expected economic growth and increased demand for petrochemicals will lift oil consumption by 1.1% this year, the consumption of transportation fuels appears to have peaked.
As independent refiners in Shandong ramp up their oil purchases, they are also processing greater quantities of crude following the issuance of new import quotas by Beijing. This surge in buying is expected to deplete oil stocks, which analysts believe could alleviate a perceived supply overhang as the year draws to a close.
Overall, the recent trends in China’s oil imports reflect a complex interplay of domestic demand, international supply challenges, and strategic adjustments within the refining sector. The trajectory of these imports will be closely monitored as factors such as economic performance and global oil market dynamics continue to evolve.
