China’s crude oil imports surged to a two-year high in November 2023, reaching an average of 12.38 million barrels per day. This figure represents a notable increase of 4.88% compared to the same month last year and marks the highest import rate since August 2023, according to government data cited by Reuters. November’s imports also exceeded those from October by 5.24%, reinforcing a trend of rising demand in the world’s largest oil importer.
Overall, the data indicates that oil imports for the period between January and November have increased by 3.2% year-on-year, totaling 521.87 million tons, which translates to a daily average of 11.45 million barrels. This uptick in imports reflects a complex interplay of domestic demand and international supply dynamics.
Shifts in Supplier Dynamics
While China experienced an increase in overall oil imports, specific suppliers saw varying results. Shipments from Russia fell by 157,000 barrels daily, averaging 1.19 million barrels per day in November. Conversely, imports from Saudi Arabia climbed by 345,000 barrels daily, reaching 1.59 million barrels daily, thus making Saudi Arabia China’s top supplier for the month. Additionally, imports from Iran rose significantly, with an increase of 233,000 barrels daily from October, bringing the total to an average of 1.35 million barrels daily.
According to Emma Li, head of China analysis at Vortexa, domestic demand has seen a seasonal decline. However, sanctions affecting crude supplies from Iran and Russia have led to substantial price reductions for feedstock. This situation has improved refining margins, encouraging more refineries to apply for advance import quotas ahead of the first batch set to be released in 2026.
Future Demand Projections
Despite the recent surge in imports, analysts predict that demand for crude oil in China is likely to remain subdued until at least the middle of next year. The Economics and Technology Research Institute, part of state energy giant CNPC, noted that while stronger-than-expected economic growth and increased demand for petrochemicals are set to boost oil demand by 1.1% this year, consumption of transportation fuels has likely peaked.
Meanwhile, independent refiners in Shandong are ramping up their oil purchases and increasing processing volumes following the issuance of a new batch of crude import quotas. This activity has contributed to a reduction in oil storage levels, which analysts believe may alleviate concerns about a perceived supply overhang as the year draws to a close.
The fluctuations in China’s oil imports, marked by significant increases from Saudi Arabia and Iran, alongside declines from Russia, underscore the complexities of global oil supply and demand. As the market adjusts to these dynamics, all eyes will be on future trends that could shape the landscape of crude oil imports in China.
