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 marks a 4.88% increase compared to the same month last year and represents the highest import rate since August 2021, according to government data reported by Reuters. The latest figures also indicate a 5.24% rise in imports compared to October, pushing total oil imports for the first eleven months of the year to 521.87 million tons, equivalent to a daily rate of 11.45 million barrels.
Shifting Supplier Dynamics
The data reveals significant changes in supplier contributions. In November, shipments from Russia decreased by 157,000 barrels per day, averaging 1.19 million barrels daily. In contrast, imports from Saudi Arabia surged by 345,000 barrels daily to 1.59 million barrels, making Saudi Arabia China’s largest oil supplier for the month. Additionally, shipments from Iran increased by 233,000 barrels daily, reaching an average of 1.35 million barrels.
Emma Li, head of China analysis at Vortexa, highlighted that while domestic demand has faced seasonal declines, sanctions on crude supplies from Iran and Russia have resulted in substantial price reductions for feedstock. This situation has boosted refining margins, prompting more refineries to apply for advance import quotas ahead of the first batch in 2026.
Future Demand Projections
Despite the surge in imports, forecasts suggest that crude oil demand in China, the world’s largest importer, may remain weak until at least the middle of next year. Stronger economic growth than previously anticipated and rising demand for petrochemicals are expected to lift China’s oil demand by 1.1% this year. However, the consumption of transportation fuels has reportedly peaked, according to the state energy major CNPC’s Economics and Technology Research Institute.
In the meantime, independent refiners in Shandong are ramping up their oil purchases and processing efforts, following the issuance of new crude import quotas by Beijing. This surge in buying is effectively reducing oil storage levels, which analysts believe could help alleviate a perceived supply overhang by the end of the year.
The evolving landscape of China’s oil imports reflects not only changing supplier dynamics but also the broader implications of geopolitical factors and domestic economic conditions. As the market continues to adjust, the interplay of these elements will play a crucial role in shaping future oil demand and supply scenarios.
