China Crude Imports Projected to Remain Subdued through Year-End

China's crude oil imports are expected to remain subdued for the remainder of the year, despite some improvement in August. The country imported roughly the same volumes of crude oil in September as it did in August, but at prices that were significantly lower due to earlier purchases. However, the outlook has soured with oil prices surging above $100 per barrel again and supply constraints from major exporters such as Iran. As a result, analysts have revised down their projections of China's crude oil imports in the fourth quarter by about 400,000 barrels per day (bpd).

The reduced import forecasts are attributed to high prices, constrained supply, and record-high freight costs, which are eroding margins for Chinese refiners. Samuel Kong, senior oil analyst at FGE NexantECA, noted that hefty premiums and expensive freight drive up the cost of feedstock. As a result, Chinese state giants are not in a rush to buy much higher volumes of crude at above $100 a barrel.

The revised import forecasts for the fourth quarter range from 9.2 million bpd-9.3 million bpd, significantly below last year's average of 11.6 million bpd. This trend is expected to continue due to the ongoing supply constraints and high prices.