Oil refining in China has fallen to the lowest level in six years.
In June, oil refining volumes in China decreased by 18% compared to the same period last year, reaching the lowest value since March 2020. This was a result of weak demand, raw material issues, and reduced profitability.
According to the National Bureau of Statistics of China, in June, Chinese refineries processed 51.24 million tons of oil. Weak economic growth and the transition of transport to electricity contributed to the decline in fuel demand, leading to reduced capacity utilization, especially in independent refineries that focused on cheaper Iranian oil. These refineries are operating at their lowest level in nine years.
Experts also emphasize that in July, processing volumes may decrease further due to maintenance shutdowns. Overall, it is expected that oil processing volumes in China will decline by 5.6% by the end of the year. This reduction by China affects global prices, although the situation in the Middle East could alter the market balance.
Earlier, it was reported that global oil demand could begin to decline by 2026. The reason would be the escalation around Iran, affecting resource production and supply.
| Period | Processing Volume (million tons) | Change % compared to the previous year |
|---|---|---|
| June 2022 | 51.24 | -18% |
| March 2020 | Lowest level since March 2020 | |
| Forecast 2023 | Decrease by 5.6% |
