In 2023, analysts predict that China will import a record amount of crude oil due to rising gasoline consumption as more people travel as a result of the removal of COVID-19 regulations and the startup of new refineries.
The issue is cited from Reuters in early 2023. China's crude imports may rise by 500,000 to 1 million barrels per day (bpd) or more this year, reaching as high as 11.8 million bpd, experts from four industry consultancies, including Wood Mackenzie, FGE, Energy Aspects, and S&P Global Commodity Insight, say, this would reverse a decline from the previous two years, and breaking the previous record of 10.8 million bpd set in 2020. The four consultancies predicted that Chinese refineries will boost oil throughput by 850,000 Due to growing local demand and appealing export markets, production is expected to climb to 1.2 million bpd over 2022 levels, or 6% to 9%.
Another positive development for the oil market will be the expectation of robust demand from the largest importer in the world, which will add to the support already provided by the OPEC+ producing group's output cutbacks and western sanctions against Russian shipments.
China has seen an increase in demand for gasoline and jet fuel when COVID limits were removed in December. Sun Jianan, an analyst at Energy Aspects, predicted that gasoline and jet fuel would be the main drivers of the increase in demand for liquid fuels. By the end of 2023, Sun predicted that jet fuel usage would be 90% higher than it was before COVID.
As per FGE analyst Mia Geng and Energy Aspects' Sun, the rebound in China's manufacturing and real estate sectors will take longer to manifest, which will slow down demand growth for diesel, a crucial industrial and transportation fuel, and naphtha, a petrochemical feedstock.
Refiners will be encouraged to increase runs in order to maintain profitable export cargoes and deliver more feedstocks to the petrochemical industry, analysts said, in addition to meeting the growing domestic demand.
Industry sources predict that two new PetroChina-owned refineries, Guangdong Petrochemical and Jiangsu Shenghong Petrochemical, with a combined capacity of 520,000 bpd, would begin functioning commercially in the coming months.
According to a corporate source, a third greenfield refinery, the 400,000 bpd Shandong Yulong Petrochemical facility, may start importing crude towards the end of 2023 in preparation for potential test runs.
Experts did list several reasons to be wary of demand projections despite all the favorable elements. External hindrances, such as a bleak outlook for the world economy, would put stress on China's export industry. The potential for a COVID virus return and the uncertainty surrounding China's fuel export policy were listed as additional risks by analysts.
References:
Aizhu, Chen & Xu, Muyu. 2022. China set for record crude oil imports in 2023, analysts say. Reuters.
Photo by evening_tao via https://www.freepik.com/China is On Track to Achieve Significant Increase in Crude Oil Imports in 2023
In 2023, analysts predict that China will import a record amount of crude oil due to rising gasoline consumption as more people travel as a result of the removal of COVID-19 regulations and the startup of new refineries.
The issue is cited from Reuters in early 2023. China's crude imports may rise by 500,000 to 1 million barrels per day (bpd) or more this year, reaching as high as 11.8 million bpd, experts from four industry consultancies, including Wood Mackenzie, FGE, Energy Aspects, and S&P Global Commodity Insight, say, this would reverse a decline from the previous two years, and breaking the previous record of 10.8 million bpd set in 2020. The four consultancies predicted that Chinese refineries will boost oil throughput by 850,000 Due to growing local demand and appealing export markets, production is expected to climb to 1.2 million bpd over 2022 levels, or 6% to 9%.
Another positive development for the oil market will be the expectation of robust demand from the largest importer in the world, which will add to the support already provided by the OPEC+ producing group's output cutbacks and western sanctions against Russian shipments.
China has seen an increase in demand for gasoline and jet fuel when COVID limits were removed in December. Sun Jianan, an analyst at Energy Aspects, predicted that gasoline and jet fuel would be the main drivers of the increase in demand for liquid fuels. By the end of 2023, Sun predicted that jet fuel usage would be 90% higher than it was before COVID.
As per FGE analyst Mia Geng and Energy Aspects' Sun, the rebound in China's manufacturing and real estate sectors will take longer to manifest, which will slow down demand growth for diesel, a crucial industrial and transportation fuel, and naphtha, a petrochemical feedstock.
Refiners will be encouraged to increase runs in order to maintain profitable export cargoes and deliver more feedstocks to the petrochemical industry, analysts said, in addition to meeting the growing domestic demand.
Industry sources predict that two new PetroChina-owned refineries, Guangdong Petrochemical and Jiangsu Shenghong Petrochemical, with a combined capacity of 520,000 bpd, would begin functioning commercially in the coming months.
According to a corporate source, a third greenfield refinery, the 400,000 bpd Shandong Yulong Petrochemical facility, may start importing crude towards the end of 2023 in preparation for potential test runs.
Experts did list several reasons to be wary of demand projections despite all the favorable elements. External hindrances, such as a bleak outlook for the world economy, would put stress on China's export industry. The potential for a COVID virus return and the uncertainty surrounding China's fuel export policy were listed as additional risks by analysts.
References:
Aizhu, Chen & Xu, Muyu. 2022. China set for record crude oil imports in 2023, analysts say. Reuters.
Photo by evening_tao via https://www.freepik.com/Related Insights
Solvay and Searles Valley Cut Soda Ash Capacity: What a Two-Continent Production Retreat Means for Buyers
Capacity reductions by Solvay in Europe and Searles Valley Minerals in California highlight structural changes in the global soda ash market. Procurement teams should understand how supply rationalization could influence pricing, investment and long-term sourcing strategies.
Acetic Acid Import Duty Returns in India: What Manufacturers Need to Know After July 1
India’s acetic acid import duty waiver ends on July 1, creating a new landed cost environment for manufacturers. This analysis explains the impact on textiles, pharmaceuticals, packaging and chemical procurement strategies.
Benzene Market Outlook as Northeast Asia Supply Tightness Begins to Ease
Northeast Asia’s benzene market is showing early signs of recovery as cracker operations improve and Gulf supply routes reopen. This analysis explains how gradual supply restoration may affect downstream chemical buyers in Q3 2026.
Mexico Pemex $5.3 Billion Petrochemical Reinvestment Plan Targets Fertilizer Output Growth Through 2030
Mexico's Pemex has unveiled a $5.3 billion petrochemical and fertilizer reinvestment strategy aimed at dramatically expanding domestic output by 2030. While the plan could reshape regional fertilizer trade over the long term, buyers should not expect immediate relief for tight global nitrogen markets.
Polypropylene Market Tightens as Asian PDH Units Increase LPG Demand and Propylene Supply Shrinks
The polypropylene market is entering a new phase of supply pressure as Asian PDH units increase LPG consumption while propylene availability tightens. Rising PP resin prices in China and uncertainty around Indian import policies are creating fresh challenges for buyers across the region.
BDO Market Shakeup: EU Anti‑Dumping Duties and Chinese Policy Shifts
European anti‑dumping duties on BDO and China’s tightening export rules are reshaping the global supply chain. Traders in spandex, PBT and biodegradable plastics must adapt sourcing strategies now.
Don't miss out on our updates! Subscribe to our newsletter now
We're committed to your privacy. Tradeasia uses the information you provide to us to contact you about our relevant content, products, and services. For more information, check out our privacy policy.
