China’s crude oil imports fell to their lowest level in a decade in June, weighed down by reduced throughput at the Strait of Hormuz that has driven up international crude prices and dampened Chinese refineries’ appetite for costlier feedstock.
Official data from China’s General Administration of Customs show the country imported just 7.12 million barrels per day (bpd) in June, a decline of 41.3% compared with the same month a year earlier. The volume also represents a 12% drop from May and marks the lowest monthly import level since October 2016.
The June figure extends a deteriorating trend that was already evident in May, when Chinese crude imports fell to their weakest in eight years. Over the same period, refinery output also retreated to a four-year low, as processors cut run rates in response to elevated crude costs and tightening restrictions on fuel exports.
Market statistics show Chinese refinery utilisation rates averaged an estimated 57.72% in June, down 3.28 percentage points from the previous month.
Despite the sharp curtailment of flows through the Strait of Hormuz, the large strategic and commercial stockpiles China had accumulated before the onset of the Middle East conflict have helped limit the fallout on the global oil market. Beijing’s ability to draw on its reserves and reduce purchases during the first four months of the conflict helped prevent an even steeper price spike, even as more than 10 million bpd of supply through the strait was disrupted.
China, the world’s largest crude importer, was particularly well positioned to weather a prolonged supply disruption. Estimates suggest the country had amassed between 1.2 billion and 1.3 billion barrels in combined commercial and strategic reserves in the year before the conflict began. The true figure may be higher, as China’s strategic stockpile levels are largely kept confidential.
A week ago, market expectations had been pointing to a recovery in Chinese import volumes as Middle Eastern oil flows began to normalise and prices edged back toward pre-war levels.
However, a renewed escalation of regional tensions and a fresh round of United States sanctions targeting Iranian crude exports have again pushed prices higher and raised the risk of a prolonged supply crisis. In that environment, any rebound in Chinese imports is likely to be delayed, particularly while refineries remain squeezed by high feedstock costs.
Source: Petro Angola / Original article: https://petroangola.com/importacoes-de-petroleo-da-china-atingem-o-nivel-mais-baixo-dos-ultimos-10-anos-em-meio-a-crise-no-estreito-de-ormuz/
