China’s crude imports reach nine-month high

Oil

China’s crude oil imports jumped by 1.81M b/d m-o-m to 10.91M b/d in December, rising for the second month in a row to the highest level since March as independent refiners rushed to utilise their remaining 2021 quotas, according to preliminary data from the General Administration of Customs. Across the year crude imports have averaged 10.32M b/d, a decline of 550K b/d y-o-y and marking the first time that annual arrivals have fallen since 2001. Imports have been restrained by continued efforts from Beijing to clamp down on the refining sector in order to curb excess domestic fuel production, while high global crude prices and a backwardated market structure incentivised refiners to draw down their inventories before making purchases, according to Reuters.

China has also recently announced plans to release crude oil from its national strategic reserves around the Lunar New Year holidays which start on 1 February. This release is part of a wider plan coordinated by the United States with other major oil-consumers to reduce global oil prices. The amount released will reportedly depend on oil prices at the time, with more set to be made available if oil rises to above $85/bbl, but a lower volume if nearer to $75/bbl, Reuters reported.