China Domestic Oil Consumption Rises as International Supplies Become Rerouted

The U.S. Energy Information Administration on Monday reported China imports 1.6 million barrels per day of crude oil, just behind the 1.9 million barrels per day of oil imports from Canada, Mexico and Saudi Arabia.

The bulk of these imports come from Saudi Arabia, which provided China with 1.4 million barrels of crude per day last year.

China is thought to have purchased as much as 5 million barrels of emergency oil reserves in recent months to protect against disruptions from the Middle East. China’s state oil firm PetroChina, for example, purchased just over 1 million barrels of oil from Russia’s Gazpromneft this May.

The international supply disruptions are driving up prices, said analysts for oil market information firm S&P Global Platts.

“Western sanctions on Iran are increasing investment by oil companies in Iran, while ongoing pipeline outages in Venezuela, Iraqi production declines and weather issues in the U.S. Gulf of Mexico are supporting a rebound in global oil prices,” Platts said.

They noted China’s continuing oil demand, which saw Chinese crude imports rise 7.3 percent in the first quarter, to 27.6 million barrels per day.

“Demand for distillates, used primarily for transportation, increased to a record 11.2 million barrels per day during that period,” Platts said.

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