China’s Crude Oil Imports Plunge to Lowest in Nearly a Decade

Chinese crude oil imports fell sharply in June to near a decade low, hampered by war in the Persian Gulf and an abrupt slowdown in domestic demand.

(Bloomberg) — Chinese crude oil imports fell sharply in June to near a decade low, hampered by war in the Persian Gulf and an abrupt slowdown in domestic demand. Crude purchases plunged 41% year-on-year to 29.27 million tons, the least since October 2016, according to customs data on Tuesday. Imports were 12% lower than May, which were already the weakest in eight years.

The recent breakdown of the US-Iran truce clouds the prospects for any revival of cargoes through the contested Strait of Hormuz. The Middle East typically accounts for about half of China’s crude purchases. Still, the oil market is on watch for signs that imports have bottomed out and that Beijing will move to replenish stockpiles.

Natural gas imports fared better, rising 3.7% in June to a five-month high of 10.93 million tons, with volumes boosted by increased seaborne imports due to a decline in domestic output and depleted storage buffers. Although the Iran war has choked shipments from a region that typically supplies about a third of China’s liquefied natural gas, the drop has mostly been offset by other sources. China’s other main energy import, coal, saw shipments from overseas surge last month after a crackdown on mine safety curbed domestic supplies of the fuel.

Purchases in June soared 30% to 42.78 million tons, another five-month high. The blast at a mine in Shanxi province in May was the worst coal accident since 2009, prompting a nationwide review of safety practices. Still, a confluence of factors, from Indonesian supply constraints to the impact of frequent rains on cooling demand and hydropower output, are likely to keep a lid on imports in subsequent months.

—With assistance from Jessica Zhou, Katharine Gemmell, Hallie Gu and Dan Murtaugh.