China Dips into Crude Oil Stockpile Again as Refinery Processing Exceeds Imports

China has been drawing down its massive crude oil stockpile for the third time in four months, as increased refinery processing exceeds available imports and domestic production. In August, refineries processed 13.91 million barrels per day (bpd), exceeding the total available from imports and domestic output by 640,000 bpd.

This is the third drawdown since May, when China tapped inventories by about 500,000 bpd. The recent draws haven't been enough to outweigh builds seen in the early part of the year, with a surplus of 330,000 bpd for the first eight months.

China's crude oil imports have been reduced due to the ongoing conflict in the Middle East, which has disrupted supplies and led to higher prices. The Strait of Hormuz remains contested between Iran and the US, while advances by Yemen's Houthi group threaten Saudi exports through the Bab el-Mandeb passage.