China's crude oil imports fall to lowest level since September 2022

(MENAFN) In July, China's daily crude oil imports plummeted to their lowest point since September 2022, as revealed by data from the General Administration of Customs. This significant decline was primarily driven by weak processing margins and a decrease in fuel demand, leading to reduced operations at both state-owned and independent refineries. The data highlighted that China, the world's largest crude oil importer, brought in 42.34 million tonnes in July, translating to approximately 9.97 million barrels per day. This figure represents a 12 percent drop from the previous month and is about 3 percent lower compared to the same period last year, based on Reuters' records of customs data. The combination of high crude oil prices and lower-than-expected domestic consumption of gasoline and diesel has severely impacted refining profits, further exacerbating the situation.

Independent refineries, which play a crucial role in China's oil processing industry, have also felt the strain. According to Chinese consultancy Oilchem, these refineries operated at around 56.11 percent of their capacity in July. This operational rate marks the lowest level in three years and is a significant decrease of 7.3 percentage points from the previous year. The reduced operation rates among independent refineries are indicative of the broader challenges facing the sector, including economic pressures and fluctuating demand. These factors have collectively contributed to the substantial drop in crude oil imports, reflecting the broader economic trends and consumption patterns within the country.

Over the first seven months of the year, the total crude oil imports amounted to 317.8 million tonnes, or 10.89 million barrels per day. This figure signifies a 2.4 percent year-on-year decline, marking a rare annual drop and the most significant decrease since early 2023. This downturn underscores the broader economic challenges and shifting dynamics within the global oil market. The combination of high crude oil prices, weakened domestic demand, and reduced refinery operations has created a complex landscape for China's oil import and refining industry. As the country navigates these challenges, the impact on the global oil market and related sectors will likely continue to be closely monitored by analysts and industry stakeholders. 

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