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China imported a record-high volume of crude oil last year, beating the previous annual record from 2020, as fuel demand rebounded after the Covid restrictions were abandoned in early 2023.
Chinese crude oil imports jumped by 11% year-on-year to 11.28 million barrels per day (bpd) in 2023, according to data from the General Administration of Customs released on Friday and reported by Reuters.
The 2023 crude imports topped the previous record level of 10.81 million bpd from 2020, when China took advantage of the plunging oil prices to import large volumes of cheap crude.
Chinese crude oil imports averaged 10.26 million bpd in 2021 and 10.17 million bpd in 2022 as domestic fuel demand was low during the Covid lockdowns and as rising oil prices, especially in 2022, limited refiner appetite to stock up on crude.
But in 2023, fuel demand – especially jet fuel and gasoline consumption – jumped as China lifted the lockdowns. Diesel demand was still weak compared to historical levels due to a patchy recovery in the manufacturing sector and the crisis in the property sector. Overall, fuel demand was much higher compared to the previous three years, although not as strong as it was in the pre-pandemic year 2019.
China’s crude oil imports in December 2023 alone rebounded from the low levels in November and averaged 11.39 million bpd. That was much higher than 10.33 million bpd of crude imports in November, when Chinese crude oil intake dropped by 9.2% year-over-year, marking the first annual decline in crude arrivals since April 2023.
Analysts expect jet fuel and demand from the petrochemical sector to drive Chinese oil demand and crude imports this year.
China is expected to account for around 25% of global oil demand growth, estimated at nearly 2 million bpd in 2024 compared to 2023, Wood Mackenzie said in a report this week.
China also issued last week a massive batch of crude oil import quotas to refiners for 2024, raising the allowances from early last year by around 60% and allocating full-year quotas to some. The high volumes of import allowances are expected to give independent Chinese refiners better visibility on their plans to purchase crude oil throughout 2024.
