China’s crude oil imports hit a record 7.82 million barrels a day (bpd) in December, customs data showed, as the world’s No.2 oil consumer took advantage of low crude prices to fill strategic reserves, but also increased its exports of refined fuels to an all-time high.
Crude imports for December were 33.19 million tonnes, up 21.4 percent on the month and 9.3 percent on the year, well above earlier estimates by Thomson Reuters Oil Research and Forecasts.
The December import figures may mean China challenges the United States to be the world’s top importer of crude, although the U.S. Energy Information Administration has yet to provide its December data. Chinese monthly imports surpassed U.S. imports once, in April 2015.
China shipped in 335.5 million tonnes of crude oil for the year, the data showed on Wednesday. That was up 8.8 percent, or roughly 542,600 bpd, to 6.71 million bpd – also a new record.
Wu Kang, Beijing-based vice chairman of FGE Asia, said the two driving factors behind growth in 2015 were new demand from small, independent “teapot” refineries who gained the right to use imported crude oil in the latter part of the year, and stockbuilding in strategic reserves and commercial storage.
Nearly 20 small refiners have been granted quotas to use imported oil or import oil directly themselves.
China seized the chance to add up to 147 million barrels to its reserves in the first eleven months of 2015, according to Reuters calculations, following a more than 50 percent slump in oil prices LCOc1 since mid-2014.
China said it more than doubled the size of its strategic crude oil reserves between November 2014 and the middle of last year, building inventories at a rate exceeding analyst estimates of the country’s stockbuilding.
Industry experts said Chinese firms could expand purchases possibly even more this year, as new tanks become available.
“2016 might be more interesting as the two driving factors are set to become more powerful as the government relaxed control both on crude imports as well as fuel exports, at a pace faster than thought,” Wu said.
Demand for crude oil could rise 4.9 percent in 2016, the country’s petroleum industry association said on Tuesday.
Even so, with waning economic growth, growth in demand for gasoline was moderate last autumn and appetite for diesel has fallen, putting oil demand – refinery throughput plus net imports of fuels – down 2.5 percent in November.
Fuel exports have risen as a result, hitting a record 4.32 million tonnes in December, or 975,500 bpd, up 5.4 percent over the previous month. Exports marked a record 693,300 bpd in 2015, up 21.9 percent.
Net fuel exports were 1.48 million tonnes in December.
China has allowed independent refineries to export fuel for the first time, having granted an estimated 440,000 tonnes of quotas under the first batch release.