Chinese crude oil imports experienced a notable increase of 11.5% in July 2023 compared to the same month last year. This surge can be attributed to major state refiners enhancing their processing rates, according to data released by the General Administration of Customs on Thursday. In total, China imported 47.2 million metric tons of crude oil during the month, which translates to approximately 11.12 million barrels per day (bpd).
Despite this year-over-year growth, July’s imports represented a 5.4% decline from June 2023, which recorded China’s highest crude imports in nearly two years. The increase observed in June was largely driven by restocking efforts following refinery maintenance and opportunistic purchases by independent refiners, who capitalized on significant discounts offered on sanctioned oil.
Independent refiners, often referred to as “teapots,” notably increased their intake of Iranian barrels in June. However, their overall imports fell in July compared to the previous month. In contrast, state-owned refiners ramped up imports as they resumed full operations after completing routine maintenance. The total refinery utilization rate in China rose to 71.84% in July, marking an increase of 1.02 percentage points from June and up 3.56 percentage points from July 2024, as estimated by consultancy Oilchem.
The improved fuel margins and the conclusion of spring maintenance schedules contributed to a significant rise in China’s oil refinery throughput in June, reaching levels not seen since September 2023. China began increasing its crude oil imports in March and April, but these heightened purchases do not necessarily indicate a rebound in fuel demand from the world’s largest crude importer. Instead, it appears that refiners are taking advantage of lower crude prices amid ongoing uncertainties surrounding future sanctions.
Analysts had anticipated that strong Chinese imports and refining output would extend into July, particularly coinciding with the peak travel season. This expectation is bolstered by the activity of state-held refiners, which seem poised to maintain elevated processing rates as they navigate the complexities of the global oil market.
As the situation develops, it will be essential to monitor how these trends in oil imports and refinery operations will influence both domestic fuel availability and international oil pricing.
