China’s crude oil imports reached a two-year high in November 2023, averaging 12.38 million barrels per day. This figure marks a 4.88% increase compared to the same month last year and is the highest rate since August 2023, according to government data reported by Reuters. Additionally, November’s imports represented a 5.24% rise from the previous month, driving total oil imports for the period from January to November up by 3.2% year-on-year to 521.87 million tons, equivalent to a daily average of 11.45 million barrels.
Significant shifts in supplier dynamics were observed in November. While shipments from Russia fell by 157,000 barrels daily to an average of 1.19 million barrels, imports from Saudi Arabia rose by 345,000 barrels daily to 1.59 million barrels, making the kingdom China’s top supplier for the month. Iranian oil shipments also saw a notable increase, adding 233,000 barrels daily from October to reach a total daily average of 1.35 million barrels.
According to Emma Li, head of China analysis at Vortexa, the recent surge in imports can be partially attributed to significant price reductions for crude supplies from Iran and Russia, a result of ongoing sanctions. Li noted, “Domestic demand has experienced a seasonal decline, but these sanctions have boosted refining margins, prompting more refineries to apply for advance import quotas ahead of the first batch in 2026.”
Despite the increase in crude imports, experts predict that China’s demand for oil is likely to remain subdued until at least mid-2024. The Economics and Technology Research Institute of the state energy major CNPC projected a 1.1% increase in oil demand for this year, largely driven by stronger-than-expected economic growth and increased demand for petrochemicals. However, the consumption of transportation fuels has peaked, indicating a shift in the market.
Independent refiners in Shandong are also ramping up their oil purchases and processing, following the issuance of a new batch of crude import quotas by Beijing. This increased buying activity is contributing to a reduction in oil storage levels, which analysts believe could help alleviate perceived supply oversupply before the year concludes.
As China continues to navigate its complex energy landscape, the strategic adjustments in its oil imports and supplier relationships underscore the country’s evolving demand and market dynamics.
