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Thursday, February 15, 2024

China Breaks Annual Crude Import Record in 2023

China sets a new annual crude import record in 2023, driven by increased fuel demand post-Covid restrictions, with economists anticipating further growth in oil demand in 2024, especially from jet fuel and the petrochemical sector.

China ramped up its stockpiling of crude last year, with imports beating the previous annual record, reached in 2020, as fuel demand bounced back after Covid-19 restrictions were lifted, Chinese customs data released on Friday showed.

The country’s oil imports surged by 11% year-on-year to 11.28 million barrels per day (bpd) in 2023, exceeding the record of 10.81 million bpd set in 2020, when Beijing took advantage of falling oil prices to stockpile large volumes of cheap crude.

Increased domestic travel following the removal of the pandemic-era lockdowns pushed oil imports up last year amid growing fuel demand. Jet fuel and gasoline consumption were particularly high in China. Diesel demand, however, was relatively weak compared to historic levels, owing to a slowdown in the construction sector and an uncertain outlook for manufacturing.

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Overall, China’s fuel demand was much higher compared to the previous three years, largely supported by growing oil deliveries from Russia. Moscow became the country’s top crude supplier in November as Beijing imported around 2.2 million bpd, according to Chinese customs data. Imports of Russian oil jumped by 22.2% between January and November of 2023 compared to the same period in 2022.

Economists forecast that jet-fuel needs and demand from the petrochemical sector for high-end products used in the manufacturing of goods such as solar panels and electric vehicles will drive Chinese oil demand and crude imports this year.

China is expected to account for over a quarter of global oil demand growth, which is due to rise by almost two million bpd in 2024 largely driven by Asian markets, according to a recent report by Wood Mackenzie.