China imported in August the third-highest monthly crude oil volumes ever as crude arrivals surged by 20.9% compared to July and by 30.9% versus August last year, according to Chinese customs data.
Chinese crude imports hit 12.43 million barrels per day (bpd) last month, the third-highest ever daily rate of arrivals in a month, per Reuters estimates on data from the General Administration of Customs.
Crude imports soared as refiners continued to build stockpiles and raise refinery runs in order to capture higher margins exporting fuels.
China’s crude oil imports in July averaged 10.29 million bpd, a significant decrease from June’s record 12.67 million bpd imports, but still 17% higher year-over-year.
In August, refiners processed much more fuel to meet the peak summer travel demand—the first non-lockdown summer in China in three years—and to benefit from high margins outside China when exporting fuels.
Refinery throughputs are likely to remain elevated as China has just issued the third batch of fuel export quotas for this year.
Last week, China issued a larger-than-expected fuel export quota in the third batch of allocations this year as authorities look to incentivize refiners to sustain economic growth and sell more product abroad at a time when China’s 2023 fuel demand may have peaked.
The latest batch of export quotas for gasoline, diesel, and jet fuel brings the total 2023 quota volumes above the allowances awarded in 2022, according to Bloomberg’s estimates.
China’s gasoline demand, however, may have already peaked, according to oil giant Sinopec. The company has adjusted its estimates about Chinese gasoline demand, considering the booming electric vehicle (EV) uptake in the world’s top crude oil importer.
According to CNEV Post, Chinese new car buyers are now choosing “new energy vehicles” (battery-electric and plug-in hybrid cars) at a rate of 37.8%, up from just 5.4% in 2020.
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