In March, China imported 14% less crude oil than a year earlier as independent refiners cut back on purchases due to tightening margins and state-owned refineries underwent maintenance, Reuters reported.
China, the world’s largest crude oil consumer imported last month 42.71 million tonnes, or 10.06 million barrels per day (bbl/d), according to data released by the General Administration of Customs on Wednesday. This is contrast to March 2021, when 11.69 million bbl/d was produced, with an average of 10.53 million bbl/d in January and February.
Imports in the first quarter of this year (Q1) totaled 127.85 million tonnes, or 10.4 million bbl/d, down 8% or around 890,000 bbl/d from the same period a year ago.
China’s independent refiners lowered their operations to just above 50% of capacity in March, compared with operating at more than 70% of capacity a year earlier, according to analysts’ estimation.
Moreover, domestic gasoline demand declined in March due to China’s “dynamic clearance” COVID-19 control policy which restricted mobility with lockdowns and led to the first decline in vehicle sales in three months.
According to customs data from Reuters, China imported 7.985 million tonnes of natural gas last month, its lowest level since October of 2020.
As a result of high spot prices, LNG imports last month were 15% below year-ago levels. Refinitiv tanker tracking reveals LNG imports last month were largely flat versus February, at 4.8 million tonnes.
The drastic cut is in line with Beijing’s steep reduction of export quotas for fuel to discourage excessive refinery processing.