China’s crude oil imports fell 14.6% in May from a high base a year earlier, with daily arrivals hitting the lowest level this year, as maintenance at refineries limited consumption of the resource.
But refinery utilization rates are expected to rebound in coming months as refineries resume operations, analysts said.
May arrivals were 40.97 million tonnes, data released by the General Administration of Customs showed on June 7, equivalent to 9.65 million bbl/d.
That compares to 9.82 million bbl/d in April and 11.3 million bbl/d in May last year when Chinese buyers snapped up cheap oil amid the spread of the coronavirus.
About 1.2 million bbl/d of China’s refining capacity was offline in May, up from 1 million bbl/d in April, according to Refinitiv analysts.
China’s crude arrivals are expected to reach 11-12 million bbl/d in the third quarter and refinery runs rise by 500,000 bbl/d from the second quarter, Mukesh Sahdev, senior vice president of Rystad Energy said.
The Chinese government has been ramping up scrutiny of the oil industry by imposing taxes on key blending fuels and investigating crude imports at state energy giants and independent refiners.
The tax policy is expected to hit demand of bitumen blend, mostly shipped from Malaysia, which analysts say is based on heavy crude from Venezuela and Iran.
“Plugging the tax holes is supportive of the refinery runs and thus should lead to higher imports,” said Sahdev.
For refined oil products, customs data on June 7 also showed exports in May fell to 5.41 million tonnes from 6.82 million tonnes in April, but jumped 38.9% higher versus a year earlier.
Total natural gas imports, including LNG and piped gas, reached 10.32 million tonnes, up from 10.15 million tonnes in April and 7.84 million tonnes in May 2020.
Shiptracking data showed that China’s LNG imports hit more than 7 million tonnes in May, a record volume for the month, buoyed by robust industrial activity and power generation demand in southern China.
Recommended Reading
Going with the Flow: Universities, Operators Team on Flow Assurance Research
2024-03-05 - From Icy Waterfloods to Gas Lift Slugs, operators and researchers at Texas Tech University and the Colorado School of Mines are finding ways to optimize flow assurance, reduce costs and improve wells.
Defeating the ‘Four Horsemen’ of Flow Assurance
2024-04-18 - Service companies combine processes and techniques to mitigate the impact of paraffin, asphaltenes, hydrates and scale on production—and keep the cash flowing.
Tech Trends: Autonomous Drone Aims to Disrupt Subsea Inspection
2024-01-30 - The partners in the project are working to usher in a new era of inspection efficiencies.
Haynesville’s Harsh Drilling Conditions Forge Tougher Tech
2024-04-10 - The Haynesville Shale’s high temperatures and tough rock have caused drillers to evolve, advancing technology that benefits the rest of the industry, experts said.
Betting on the Future: Chevron Technology Ventures’ Investment Strategy
2024-04-09 - After a quarter century, Chevron Technology Ventures seeks both incremental and breakthrough technologies with its early-stage investment program.