Chinese refiners’ purchases of cheap crude oil have fallen this Autumn. Crude oil imports in October were down 4 percent from Russia and 30 percent from Saudi Arabia compared with September.
According to China’s general Administration of Customs, imports of crude including pipeline oil, from Russia during October fell to 1.56 million barrels per day (mbd) compared to 1.82 mbd in September and 1.64 million barrels per day during October 2019. Likewise, imports from Saudi Arabia in October fell to just 1.4 mbd, which is at least 29 percent down on the same period a year ago. In addition, China’s crude oil imports from the United States dropped from a record high of 3.9 million tonnes in September to just 1.63 million tonnes during October, according to China’s custom data.
In addition, Russian ESPO (is a public sector owned professional buying organisation) premiums have fallen for November delivery thanks to weak fuel demand. Similarly, Saudi Arabian exporters has seen a deep cut in its October OSPs to Asia.
However, this could be just a temporary blip. China is the world’s biggest buyer of oil and as the recovery gathers pace and Chinese port congestion eases, we can expect to see a recovery and increase in China’s demand for crude oil.