Key facts
- China's crude oil imports are expected to increase by approximately 1.2 million barrels per day in the fourth quarter.
- Refiners are seeking alternative supplies from Africa and South America due to Middle Eastern disruptions.
- High crude prices, with Brent above $93/barrel, are limiting demand and stockpiling.
- China is increasingly relying on Russian crude, importing 1.25 million barrels daily, while Iranian imports slump.
- Fourth-quarter import rates are projected to reach 9.9 million barrels daily, lower than last year's peaks.
China's crude oil imports are anticipated to rebound in the final quarter of the year, with an estimated increase of about 1.2 million barrels per day compared to the current period, according to energy consultancies cited by Bloomberg. Analysts from Rystad Energy, Energy Aspects, and FGE NexantECA suggest that oil purchases by Chinese refiners are approaching 10 million barrels daily, though this level may not be consistently reached until year-end.
Despite the projected rise, fourth-quarter import rates are forecast to be around 9.9 million barrels daily, significantly lower than the peaks of 12 to 13 million barrels per day observed last year. The primary factor constraining Chinese oil buying is the elevated price of crude, with Brent trading above $93 per barrel and the OPEC basket at $91.27. This high cost, coupled with substantial existing inventories of over 1 billion barrels accumulated over the past two years, is weakening demand.
Furthermore, disruptions in Middle Eastern oil flows, which typically supply the medium sour crude favored by most Chinese refineries, are forcing buyers to seek alternatives from Africa and South America. Energy Aspects analyst Jianan Sun noted that the prolonged conflict and reduced Middle Eastern exports, combined with high crude prices, are preventing significant stockpiling activities.
Chinese buyers are increasingly substituting barrels previously sourced from Iran, which have been impacted by U.S. naval blockades, with Russian crude. New data from Kpler indicates that China is on track to import Russian crude at a rate of 1.25 million barrels per day, a decrease from July's 1.42 million barrels per day but still substantial as Iranian oil imports have fallen to an estimated 340,000 barrels daily for August.