China’s oil imports surge by 17.5 percent

China, the world’s top oil importer, saw its crude oil imports recovered in August to 25.19 million metric tonnes (mt) or an average 5.96 million barrels per day (bpd), surging 17.5 percent year on year, according to preliminary data released on Monday by the country’s General Administration of Customs.

The volume was 6 percent higher than the July volume of 5.62 million bpd, which had been the first year-on-year contraction in crude imports since October 2013.

China’s oil demand growth hinges on several factors, such as domestic economic growth and trade, power generation, transportation sector shifts, and refining capabilities.

China resumed crude exports last month after a five-month hiatus since March, shipping out 110,000 mt, although this was a 47.6 percent slide from August 2013.

This brought the country’s net crude imports in August to 25.08 million mt, or 5.93 million bpd, up 18.2 percent year on year.

Over January-August, China’s total crude imports rose 8.4 percent year on year to 200.92 million mt or an average 6.06 million bpd, according to the data.

Year-to-date crude exports plunged 71.2 percent year on year to 360,000 mt, bringing net crude imports to 200.56 million mt, which was an 8.9 percent increase from a year earlier.

China’s oil product imports slipped 1.6 percent year on year to 2.53 million mt in August, while oil product outflows rose 9.6 percent year on year to 2.73 million mt. This means China was again a net exporter of oil products last month, for the fourth time this year.

China had rarely been a net oil product exporter before this year but weak demand growth and ample production from domestic refineries have resulted in declining imports and relatively higher exports of oil products.

From January to August, China’s total oil product imports slumped 28.3 percent year on year to 19.65 million mt, while oil product exports dipped 0.5 percent year on year to 19.12 million mt, the data also showed.

China currently imports around 5.6 million barrels of oil per day on net, with about half of those imports coming from the Persian Gulf region. Saudi Arabia, Iran, Oman, and Iraq dominate the list (as do Russia and Angola) — and most of the oil flows through the Strait of Malacca, a vulnerable chokepoint.

The Energy Information Administration (EIA) estimates that China surpassed the US in net oil imports sometime late last year.

The country’s oil imports are rising due to its rapid growth, as more and more people are driving. Part of it is due to the fact that China has been slow to develop its own domestic oil resources. So the country has to seek out petroleum abroad.

EIA forecasts that China’s oil consumption will continue growing through 2014, and its net oil imports will reach 6.6 million bpd.

FEMI ASU