China Imported Record Volumes of Crude Oil During First Six Months Of 2023: EIA

China imported record volumes of crude oil during the first six months of 2023, according to an Sep.18 report from the U.S. Energy Information Administration. During the first half of 2023, China imported an average of 11.4 million barrels of crude oil per day, a 12 percent increase compared to the same period last year.  The increase in Chinese crude oil imports can be attributed to the reopening of the economy, after the government relaxed COVID-19 mobility constraints and growth in the country’s refineries.

The key suppliers of crude oil to the Chinese economy during the first half of 2023 have been Russia, Iran, Brazil and the U.S. China imported 400,000 barrels per day from Russia during the first half of 2023, 23 percent higher than compared to a similar period during  2022. Following the Russian invasion of Ukraine, and the consequent Western sanctions on Russia, the Chinese economy has benefited from the geopolitical situation and increased crude oil imports at a cheaper unit rate.  Meanwhile, Chinese imports from Saudi Arabia increased by seven percent to 130,000 barrels per day during the first half of 2023, compared to the same period in 2022.Meanwhile, Chinese imports from Brazil increased by 49 percent to 250,000 barrels per day and more than doubled from the U.S.

Chinese imports from Malaysia rose by 330,000 barrels per day, or 46 percent to 1 million barrels per day during the first six months of 2023, according to China’s General Administration of Customs data. Chinese imports from Malaysia exceeded the total production in Malaysia, which led analysts to believe  that crude oil volumes that were shipped from Iran to China, were relabelled as originating from countries such as Malaysia, in order to circumvent sanctions.

Independent refineries have increased crude oil imports as a result of high refining margins, amid discounted feedstocks and a domestic demand recovery. Refiners in China used the crude oil to process a record 14.7 million barrels per day of crude oil during the first six months of 2023, a eight percent increase from 2022’s annual average.

The Chinese economy is currently taking advantage of cheap Russian crude oil to build stockpiles and export refined products. In this way, Chinese stakeholders are benefiting from cheap crude oil for domestic users and also the opportunity to boost exports and receive higher profit margins. Moreover, easing COVID-19 related lockdown restrictions have also led to higher crude oil consumption domestically and increased the need for imports.