Chinese oil demand falls, falls as economic ebb eases fuel imports

It also cut crude oil imports from Saudi Arabia, the second largest supplier, by 6.5% in the two months.

For total July crude imports, China reported a 3% drop to 42.3 million tonnes, the lowest level since September 2022. Country-specific trade data for the month has not yet been released.

Although the decline in Russian imports is driven by reduced global demand, it remains significant that the decline is larger than the overall decline in China’s total oil consumption, Sherwood said.

However, Malaysian imports bucked the trend with a 45.1% month-on-month increase in May.

Sherwood said Malaysia’s crude oil exports to China, which have exceeded production capacity, could be “excess production” from Russian stockpiles diverted to China.

“There’s no way to confirm this for sure, but it’s hard to explain the Malaysian numbers any other way,” he said. “We can only assume that the sudden drop in Russian oil imports is related to the sudden increase in Malaysian imports.”

The slowdown prompted the International Energy Agency, the industry watchdog, to cut its forecast for global oil demand in its monthly report.

01:34

China is building the ‘world’s heaviest oil and gas platform’ for Saudi Arabia

China is building the ‘world’s heaviest oil and gas platform’ for Saudi Arabia

“Weak growth in China, following further post-Covid growth in 2023, is now significantly weighing on global earnings,” the Paris-based agency said on Tuesday, forecasting global oil demand to grow by less than 1 million barrels per day in this year and in 2025.

“Headwinds from the real estate sector and increasing penetration of LNG trucks and electric vehicles are likely to impact demand for diesel and gasoline,” it said.

OPEC cut its forecast for global oil demand growth this year from 2.2 million barrels per day to 2.11 million barrels per day due to a reduced appetite for oil in China.

But the bloc was still bullish on the demand outlook for the world’s second-largest economy, saying steady growth and an increase in travel would increase the need for fuel.