According to official customs data reported by Reuters, the amount of crude oil imported into China in July – although slightly down on June’s record figure – was up 25% compared with the same month in 2019, having imported an average 12.08 million barrels per day (BPD) last month.
Chinese demand is often seen as a barometer for the wider world economy, so continued strong demand from China is a positive signal for the oil industry. Reuters points out, however, that the figures refer to oil arriving in China and having cleared customs. Some Chinese ports have been struggling to cope with the record level of imports, with some tankers having to wait weeks to offload crude.
It’s therefore likely that much of the crude imported in July was bought in April, when oil prices were particularly low, suggesting that Chinese traders had been buying up bargains.
According to an estimate from Refinitiv analyst Emma Li, more than a million BPD of the imported oil may have come from the US. This likely provided some relief to US producers like ExxonMobil, the oil major behind the Mobil lubricant brand, when they were struggling to sell or even store crude oil.
While imports are likely to slow down in the coming months as Chinese storage capacity fills up, China’s oil demand is already up 10% for the first six months of the year, averaging 10.78 million BPD despite the pandemic slowing down the country’s economy earlier in the year.
