Oil imports to China have fallen to their lowest level in the last ten years.

China drastically reduced oil imports, weak demand persists

China reduced its seaborne oil imports to an impressive 6.4 million barrels per day in June, marking the lowest level since October 2016. This is due to weak demand observed since the beginning of the conflict in Iran.

According to analytics firm Kpler, China, the world’s largest oil importer, cut purchases by nearly 8% in June compared to the previous month. At the start of the year, following the conflict in Iran at the end of February, China reduced imports by approximately 4 million barrels per day compared to normal levels. The ceasefire between the US and Iran partially restored shipments through the Strait of Hormuz, but Chinese oil demand has yet to recover to previous levels.

China compensated for the reduction in oil imports by decreasing exports of petroleum products, limiting production at refineries, and using commercial reserves. However, a weak economy, coupled with the rapid transition to electric vehicles, may impact a long-term decline in oil demand. Analysts warn that the situation may remain consistently low over the coming months.

Globally, due to the unexpected drop in Chinese imports, the world demand and supply were balanced, helping to keep oil prices below 100 dollars per barrel.