China's Oil Surplus Inched Higher in 2024
01.20.2025 By Tank Terminals - NEWS

January 20, 2025 [Oil Price]- China’s crude oil surplus last year increased to around 1 million bpd as refiners rushed to stock up on cheaper Russian crude, enjoying some purchasing flexibility for this year.

 

Reuters’ Clyde Russell reported the average daily surplus stood at 1.15 million barrels, which compared with 760,000 barrels a year earlier. This, Russell, suggested, would give Chinese refiners options in handling the recent spike in oil prices prompted by the Biden administration’s parting sanction shot at Russia, which specifically targeted its energy industry.

The basis for the calculations was crude oil imports, local production, and refining data from the government. Last year, China’s crude oil imports plus domestic production averaged 15.28 million barrels daily, while refineries processed an average of 14.13 million barrels daily, leaving a surplus of 1.15 million barrels daily.

The refining average constituted a dip, by the way, and that was the first dip in refining rates in 20 years. The cause of the dip was weaker fuel demand, which depressed refining margins in 2024. Oil demand in China was lackluster in 2024, with consumption growth slowed, due to weaker economic performance and a shift to electric vehicles and LNG-fueled trucks.

Although some of the weakness is attributable to weaker economic performance, analysts believe the shift toward EVs and LNG trucks is removing some road fuel demand permanently. However, now it is emerging that Chinese car buyers are growing fonder of hybrids rather than full EVs, which suggests there may yet be a change in oil demand patterns in the world’s largest importer of crude.

Crude oil imports into China also declined last year, for the first time in some 20 years, excluding the pandemic lockdown period. The average import level stood at 11.04 million bpd in 2024, down by 1.9% from 2023, customs data showed earlier this month.

 

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