Key facts
- China's crude oil imports in June fell 41.3% year-on-year to 7.12 million barrels per day, the lowest since October 2016.
- Refinery runs in China hit a six-year low in June, equivalent to 12.47 million bpd.
- Asian buyers are increasing purchases of U.S. crude oil due to renewed tensions in the Strait of Hormuz.
- China's electric taxi and rideshare fleet is growing, reducing gasoline and diesel consumption.
- Some Chinese refiners have reduced August term crude orders from Saudi Arabia.
Asian oil importers are increasing purchases of U.S. crude oil as tensions in the Strait of Hormuz intensify, disrupting tanker traffic. This pivot follows a significant drop in China's crude oil imports in June, which reached a decade low of 7.12 million barrels per day, a 41.3% year-on-year decrease. This volume was the lowest since October 2016 and represented a 12% decline from May. Chinese refinery runs also hit a six-year low in June. Some Chinese refiners have reduced August term crude orders from Saudi Arabia due to weak domestic demand and disruptions in the Strait of Hormuz. The U.S. has seen record crude oil exports since March. Refiners across Asia, particularly those dependent on shipments through the Strait of Hormuz, are diversifying their import sources.
China's growing electric taxi and rideshare fleet is providing a buffer against oil price shocks. In May, taxi and rideshare trips reached 3.05 billion, a 6% increase since late February, coinciding with rising gasoline prices. This surge is driven by intense competition among drivers and the availability of cheap electric vehicles, which has depressed fares and attracted passengers seeking to avoid higher fuel costs. Approximately half of China's 1.3 million-strong taxi fleet is electric, with major cities nearing 100% electrification. Consequently, China burned 10% less gasoline and 14% less diesel in May compared to the previous year. This reduced oil dependency allows China to cut imports without heavily tapping reserves, freeing up oil cargoes in the global market and helping to moderate oil prices.