China's Oil Imports Plummet Amid Weaker Demand

China's recent decision to cut its crude oil imports has provided some relief to the global oil market, which was under pressure from supply disruptions in the Middle East. According to Reuters, China reduced its purchases from an average of 12 million barrels per day (bpd) in February to about 7 million bpd in June, a decline of roughly 5 million bpd.

The sharp reduction in imports came as China experienced weaker refinery activity and softer domestic fuel demand, driven by growing electric vehicle adoption, slower infrastructure spending, and changing conditions in the petrochemical sector. Analysts said the decline in Chinese crude imports absorbed part of the supply shock caused by disruptions to Gulf oil shipments during the Strait of Hormuz crisis.

Instead of drawing heavily on its strategic petroleum reserves, China relied largely on weaker demand and commercial inventory drawdowns despite holding an estimated 1.4 billion barrels of above-ground crude inventories. Analysts believe much of the country's underground strategic reserves remain untouched.