ForexMinute had earlier reported that last year for some point of time, China became the largest consumer of oil. The second largest economy of the world has a huge requirement for crude oil and most of it is met by imported crude. In January this year, the country imported record high 6.63 mln bpd which is up by 11.9 pct on yr, up 5.1 pct on month.
Nonetheless, China’s crude oil imports data indicates that companies restocked ahead of the Lunar New Year holiday despite tepid demand growth. This is encouraging as media reports and even the government policy makers have been admitting that they are concerned about the slow manufacturing sector.
According to the General Administration of Customs the world’s top energy consumer took in 28.16 million tonnes, or 6.63 million bpd, of oil last month. Thus, the imports have gone up 5.1 percent from the previous record of 6.31 million in December 2013. Also, China has boosted its annual purchase of Iraqi crude.
China Contracts with Russian and Iraqi Oil Companies for Crude Oil Imports
Now, China imports 882,000 bpd this year. Also, state-oil firms had higher-volume term crude contracts starting up in January. A lot of oil is being imported from Iraq and Russian to feed new refineries coming online in the first quarter. In fact, Russia’s top oil producer Rosneft is going to ship an additional 180,000 bpd of oil this year to China.
China and Russia are already going ahead with PetroChina’s $6 billion refinery and petrochemical complex in Sichuan province in the southwest. The refinery is expected to produce 200,000 bpd. Also, there is state-run Sinochem Corp’s new refinery with its 240,000 bpd Quanzhou plant which began its operation the last month.
Sinochem Corp’s new refinery is processing sweet crude from West Africa for test runs before switching to sour crude from the Middle East once it goes into normal operation. Overall there has been more than a 4 percent increase in the oil import in China which again is expected to rebound slightly as new refineries open.
Market observers believe that a lot of imported oil went straight into storage as a lot of this has not yet been processed. Despite China’s implied oil demand growth declining to its lowest in more than two decades in 2013, the country became the largest consumer in September last year.
To contact the reporter of this story: Jonathan Millet at email@example.com