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.
The March 20 lease sale in the U.S. Gulf of Mexico brought in $244.3 million in high bids.
The latest discovery was made by the Mako-1 well drilled about 10 km southeast of the Liza Field.
Top producers in the Northeast are planning to produce a combined 17 billion cubic feet of gas per day (Bcf/d), up 2% from 2019, analysts forecast.