In April, China’s fuel oil imports surged by 10 percent compared to the same period last year, totaling 2.93 million metric tons, as per data released by the General Administration of Customs on Monday, marking the highest level recorded since at least 2020 according to Reuters’ data.
The April imports, equivalent to approximately 620,180 barrels per day, saw a remarkable 48% increase from March. Traders attribute this surge to heightened shipments from Venezuela and Iran, according to sources familiar with the trading activities.
The import figures encompass purchases made under regular trade protocols, which are subject to import duty and consumption tax, as well as imports directed to bonded storage. Importation into bonded tanks hit 2.21 million tons, roughly translating to 467,800 barrels per day, also marking the highest level since at least 2020.
“Higher supplies from Venezuela due to the relaxation of sanctions contributed to the higher volumes. Refiners’ margins processing the heavier materials were also supportive,” said one Chinese trading executive.
Imports trended higher as some refiners ramped up purchases before prices strengthened further, amid a global rally in the high sulphur fuel oil market in the second quarter this year.
Meanwhile, fuel oil export volumes, mostly of low-sulphur fuel oil, in April were at 1.64 million tons, or about 347,130 bpd, up 10% from the corresponding month last year.
Exports rose from the same month last year as global bunker demand firmed amid geopolitical shipping disruptions this year.
The exports are measured mostly by sales from bonded storage for vessels plying international routes.
During the initial four months of the year, China, the largest importer of crude globally, increased its storage by 700,000 barrels per day (bpd), a substantial quantity that challenges the perception of robust oil consumption amidst an economic rebound. China doesn’t openly reveal the amounts of crude entering or exiting strategic and commercial reserves.
However, an approximation can be derived by subtracting the volume of crude processed from the total available from imports and domestic production.
The overall picture that emerges is that China’s oil import growth is modest so far in 2024, and more of those imports are heading into storage than they did in 2023.