China Steps Up as Asia's Crude Oil Demand Takes a Hit

China is compensating for reduced crude oil shipments from the Middle East by cutting its own imports, according to recent data. The country's reported arrivals of 8.41 million barrels per day in July were up from June's near decade low of 7.12 million but still 24.3 percent below last year's figure.

This means that China is essentially doing the heavy lifting for Asia in terms of reducing crude oil demand, making it a balancing force in the region. The data also shows that while imports were up from April's low of 18.77 million bpd, they are still down about 4 million bpd from the average of 26.89 million bpd before the Iran conflict.

China's vast crude stockpile, estimated to be at least 1.2 billion barrels strong, gives it the ability to sustain lower imports for an extended period. However, the question remains how long China is prepared to be this balancing force and whether its imports will stage a recovery in August as some analysts predict.