China’s Crude Oil Imports Increased by 5% in January and February

Chinese crude oil imports jumped by 5.1% in January and February compared to the same two months last year, government data showed on Thursday, as fuel demand rose during the Lunar New Year holiday last month.

China, the world’s largest crude importer, saw oil cargo arrivals rise to a total of 10.74 million barrels per day (bpd) in the first two months of 2024, compared to about 10.4 million bpd in January-February 2023, according to Reuters’ calculations based on data in tons reported today by the Chinese General Administration of Customs.  

China’s customs office does not report separate data for January and February to avoid distortion due to the Lunar New Year holiday, which typically begins at the end of January or early February. This year, the holiday period fell in the middle of February.

During the holiday period, in which tens of millions of Chinese traveled, China’s demand for gasoline and jet fuel surged, according to Reuters’ estimates.   

As a result, state-owned refiners kept crude throughput rates stable or slightly higher compared to December, but the independent refiners – the so-called teapots – reduced run rates due to lower refining margins, industry sources told Reuters.

Despite possible distortion due to the Lunar New Year holiday period, a large part of the rise in crude imports in January was due to higher demand compared to January 2023, when China was reopening from the COVID lockdowns, and because of lower commodity prices at the time the orders were placed in the fourth quarter of 2023.

Oil prices declined in the last quarter of last year after hitting a 2023 high of over $95 per barrel in September.

Considering the time lag of around two months between crude purchases and nominations and the arrival of the crude in China, it could be concluded that Chinese refiners have continued to buy more oil when prices were falling.

By Charles Kennedy for Oilprice.com

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