Chinese crude oil imports dropped by 9.2% year-over-year in November, marking the first annual decline in crude arrivals since April, and potentially signaling weakening demand.
China imported 10.33 million barrels per day (bpd) of crude oil last month, down from October’s imports by more than 1 million bpd, per data from the General Administration of Customs released on Thursday.
The Chinese crude arrivals in November were the lowest since July this year and saw the first year-on-year decline since April.
In October, stronger fuel demand due to a week-long holiday and a fresh batch of oil import quotas boosted China’s crude oil imports by 13.5% year-over-year.
China imported 11.53 million bpd of crude oil in October, slightly up compared to 11.13 million bpd in September, but much higher than in October 2022, when the world’s top crude oil importer was still under strict COVID-related travel restrictions.
But in November, reduced imports from the independent refiners, the so-called ‘teapots’, and the struggling Chinese manufacturing and property sectors led to a decline in crude oil imports compared to both the previous month and the same month of last year, when Covid restrictions were still in place.
China’s independent refiners, the biggest customers of Venezuela’s crude before the U.S. sanctions relief, are said to be holding back fresh purchases of oil from the Latin American country due to unpredictable discounts on cargoes after international majors returned to Venezuelan trades.
Further weighing on Chinese oil imports have been weak manufacturing activity and the ongoing property crisis.
China’s manufacturing purchasing managers’ index (PMI) unexpectedly fell slightly in November from October, for a second consecutive month.
In addition, Moody’s changed this week its outlook on China’s government credit ratings to negative, saying that “The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector.”
By Tsvetana Paraskova for Oilprice.com
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