China buys more oil, adding pressure to tightening market
AgenciesChina is showing early signs of stepping up imports of crude oil after months of subdued buying amid the US-Israel war on Iran, threatening to erode a buffer that has helpe...
China has recently started increasing its crude oil imports after a period of low demand due to the ongoing US-Israel conflict with Iran. This move has put pressure on the already tight oil market, potentially leading to higher global oil prices. However, experts do not anticipate China to quickly resume its pre-war import levels, as the high oil prices could negatively impact Chinese refineries and its extensive oil reserves are sufficient to sustain several months' consumption.
In August, China's crude imports rose by 6.2% compared to the previous month, hitting 37.9 million tonnes, which was the highest level seen in four months. This upward trend has continued in September, with Chinese crude imports reaching 7.84 million barrels per day (bpd), up from 7.25 million bpd in the previous month. This increase comes at a time when the oil market is experiencing further disruptions due to conflicts in Ukraine and the Middle East.
China's imports from Iraq have surged from 177,000 bpd in August to over 1 million bpd this month, while its purchases from Iran and Saudi Arabia are expected to decline. According to Ivan Ryabov, head of oil trading analytics at Kpler, this recent partial rebound in Chinese import demand coincides with heightened uncertainty about the availability of crude oil from the Middle East due to recent attacks.
Experts suggest that Chinese firms have curbed their crude purchases for several months but are now returning to the market to replenish domestic product inventories. The decline in China's crude oil stockpiles, which fell from about 1.25 billion barrels to 1.14 billion barrels in September, is making it harder to maintain the "China buffer" that had kept oil prices in check.
Analysts agree that China's muted crude buying in recent months has helped curb the upward pressure on oil prices, but its return to the market is unlikely to alleviate the current oil supply concerns. Even though China still has ample crude stocks that could meet over 80 days of demand, the risk to its crude supply does not seem imminent.
Written by urgent.news from Qatar Tribune Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
