China's Rebound in Oil Imports Adds Pressure to Tightening Market
China's crude oil imports have increased in August and September, adding pressure to a tightening global market. According to Chinese customs data, China's crude imports rose by 6.2% in August to hit 37.9 million tonnes, the highest import level seen for four months. However, this figure is still more than 23% lower than a year earlier.
The recovery has continued into September, with China's crude imports running at 7.84 million barrels per day (bpd), up from 7.25 million bpd in August. This uptick in Chinese purchases has come amid renewed turbulence in the oil market, caused by conflicts in Ukraine and the Middle East.
China's imports from Iraq shot up from 177,000 bpd in August to over 1 million bpd this month, but its purchases from Iran and Saudi Arabia are set to decline. According to Kpler, China's vast crude oil stockpiles have been declining since April, with inventories falling from about 1.25 billion barrels to 1.14 billion barrels in September.
Analysts do not expect Chinese buyers to return to the market aggressively, as elevated crude prices could squeeze margins for Chinese refineries and the country's stockpiles are still large enough to last for several months. China's oil inventories have fallen significantly from the levels built up before the Strait of Hormuz closure, making it harder to sustain the 'China buffer' that had helped keep oil prices in check.