China’s Oil Imports Down 5% in January and February

China’s crude oil imports over the first two months of the year fell 5% on 2024 as the parting round of sanctions that the Biden administration imposed on Russian energy affected international flows.

The total that China imported over the first two months of the year came in at 83.85 million tons, according to a Reuters report, which translated into an average daily import rate of 10.38 million barrels. A year ago, the average daily was 10.74 million barrels.

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Natural gas imports also slowed during the first two months of the year, by a sizable 7.7% to a total 20.31 million tons in pipeline flows and LNG imports. A relatively warm February contributed to the weaker demand, which led to China slipping to the global number-two spot in LNG imports, overtaken by energy-hungry Japan. In addition to the weather, demand in China was also weaker due to lower industrial activity and ample gas in storage.

Crude oil imports into China also declined last year, for the first time in some 20 years, excluding the pandemic lockdown period. The daily average stood at 11.04 million barrels, down by 1.9% from 2023. The 2023 figure, however, was an outlier with record imports of 11.28 million barrels daily.

The import growth rates of the last 20 years are unlikely to return as China’s economy moves to a more measured pace of growth as it matures. Both China’s state energy giants CNPC and Sinopec have predicted peak oil demand growth on the horizon, with CNPC forecasting it for this year and Sinopec sees the peak coming in 2027.

The biggest reason for the decline in oil demand in the world’s biggest importer, according to most observers, is the penetration of electric vehicles, which is the highest in the world. However, Chinese driers have lately been shifting to hybrids, which suggests that while it may yet start to decline, demand for oil from the Chinese transport sector is more resilient than expected by some.

By Irina Slav for Oilprice.com

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