Despite the devastating coronavirus pandemic that locked down China for weeks, the country’s overall crude oil imports during the first half of the year rose 9.9 percent on the first half of 2019, customs data cited by Reuters has revealed.
At 269 million tons in total, China’s first-half oil imports came in at an average of 10.95 million bpd, using the conversion rate of 7.33 barrels equaling 1 metric ton.
This is a pretty respectable figure overall, especially given that most of the import growth was registered over the last three months, with imports of crude hitting yet another record in June, at 11.93 million bpd, according to data from energy analytics services provider OilX. The June figure was 25.4 percent—or 2.4 million bpd—higher than the average rate of June imports in 2019.
Reuters later calculated China’s June oil imports at an even higher level of 12.9 million bpd.
The previous record was set in May when China imported an average of 11.34 million bpd of crude.
China has been the focus of attention of the oil industry as producers look to the world’s second-largest consumer and largest importer of the commodity to help prop up prices. However, much of the May and likely the June increase in imports was driven as much as by the recovery of economic activity after the lockdown as by the allure of low oil prices.
China began to stock up on cheap oil immediately after the benchmarks crashed following Saudi Arabia’s declaration of what was effectively a price war against Russia that coincided with the initial spread of the coronavirus. Traders and refiners continued buying until reports began to emerge that China’s oil storage may be close to filling up.
This presented a new headache for oil producers and sellers, highlighting the vulnerability of oil prices to a single import market.
According to Reuters columnist Clyde Russell, China stored oil at a rate of 1.88 million bpd over the first five months of the year, compared with a rate of 1.21 million bpd a year earlier. IHS Markit estimates the country’s total oil in storage had swelled by 440 million barrels in the first six months of the year.