
China dipped slightly into crude stockpiles in the first two months of the year as refiners processed more oil and imports remained weak.
It was the first time in 18 months that refinery throughput exceeded the amount of crude available from imports and domestic production.
Refiners processed about 30,000 barrels per day (bpd) more in the January-February period than the total of crude available, according to calculations based on official data.
The combined total of 14.71 million bpd was 30,000 bpd below the volume processed, the first time since September 2023 that processing exceeded available crude.
Given that it's a relatively rare occurrence for refiners to process more crude than the total of imports and domestic output, it's worth asking why this was the case for the first two months of 2025.
The main reason is that crude imports were weak in the first two months, dropping 5% from the same period in 2024.
China does not disclose the volumes of crude flowing into or out of strategic and commercial stockpiles, but an estimate can be made by deducting the amount of oil processed from the total of crude available from imports and domestic output.
Refiners processed the equivalent of 14.74 million bpd in the first two months of the year, up 2.1% from the same period a year earlier, according to data released on Monday by the National Bureau of Statistics.
China combines import data for January and February to smooth out the impact of the week-long Lunar New Year holiday, the timing for which changes each year.
China, the world's biggest crude importer, saw arrivals of 10.37 million bpd in the first two months of the year, and domestic production of 4.34 million bpd.
There were likely two main factors behind the decline in imports, the first being that refiners cut back on cargoes from Russia after outgoing U.S. President Joe Biden imposed new sanctions in mid-January on tankers carrying Russian crude.
But it's also worth noting that refiners didn't appear to make much effort to replace Russian oil with cargoes from other suppliers, and the most likely reason for that was the strength of global crude prices in January and February.
Benchmark Brent futures reached their highest point so far this year of $82.63 a barrel on Jan. 15, having risen steadily from levels around $70 at the start of December.
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