Chinese refinery crude oil throughput has reached its highest level ever, with total processed volumes up 12% in the first five months of this year compared to 2020, and up 10.9% from the same period in 2019. In total 292.7m tonnes have been processed so far this year according to the National Bureau of Statistics China.
Despite the 12.0% growth in crude oil processing, Chinese crude oil supply, which includes imports and domestic production, has only grown by 2.3% in the first five months of this year. Crude oil imports have totaled 220.5m tonnes with China producing a further 82.6m tonnes domestically. The total supply of 303.2 million tons, adding domestic production to imports, implies that in the first five months of this year, Chinese crude oil stocks rose by 10.7m tons.
However, the increasing crude oil price has in the past two months caused China to draw on the high stocks that it built up last year. In the past two months China has processed 3.6m more tonnes of crude oil than it has imported and produced.
“The fact that the price of oil has once again exceeded USD 70 per barrel has encouraged China to start using their high stocks rather than continuing to build them, which is what they have been doing over the past many months. Despite this, Chinese crude oil imports in the first five months of the year were still record high, one of the only positive headlines for tanker shipping this year,” says Peter Sand, BIMCO’s Chief Shipping Analyst.
“As we move into the summer months, the growth in Chinese imports may turn negative year on year as imports in the coming months are unlikely to match the record-high imports that we saw over the summer of 2020 thanks to the oil price war.”