China's Daily Crude Oil Imports Plunge by 3 Million Barrels, Helping to Curb Global Oil Prices

(Central News Agency, Taipei, 12th) According to a report by the Chinese website of the Wall Street Journal, China's crude oil imports in May fell to 7.8 million barrels per day, 3 million barrels less than usual. During the Iran war, China's crude oil imports have dropped significantly, playing an important role in curbing oil prices and maintaining the stable operation of the global economy.

The report says clues are emerging about the mystery of this 'disappearing oil.' Currently, Chinese citizens are driving gasoline cars less and choosing trains over planes for travel. At the same time, Chinese factories that convert crude oil into raw materials for plastics and other materials are reducing production capacity. Additionally, the Chinese government has begun to tap into its strategic petroleum reserves. So far, the daily lives of Chinese citizens do not appear to have been significantly impacted.

When the US and Israel attacked Iran, effectively blocking the Strait of Hormuz, many analysts predicted that a prolonged blockade could push oil prices to $150-200 per barrel, potentially triggering a global recession. However, the blockade is now in its fourth month, and despite ongoing conflict, the benchmark Brent crude oil price remains below $100 per barrel.

It is noted that actions by the world's largest oil producer, the United States, and the largest oil importer, China, help explain this unexpected oil price resilience.

Official Chinese customs data shows that China's crude oil imports in May fell to 7.8 million barrels per day, including oil delivered via pipeline from Russia. Before the Iran war broke out, China had spent months stockpiling cheap Russian and Iranian oil. Most analysts estimate China's total crude oil reserves are between 10 billion and 14 billion barrels, enough to cover at least several months of import demand, but the Chinese government is reluctant to disclose the exact figure.

'There are signs that China's gasoline demand has seen a significant decline,' said Saad Rahim, chief economist at Trafigura, one of the world's largest commodity traders. He added that it is currently difficult to determine how much of this decline is structural and how much is a temporary shift.

Emma Li, a China analyst at Vortexa, expects China to further tap its oil reserves, and the surprising market resilience could last for a considerable period. She stated that for refineries, using reserves directly is more cost-effective than buying expensive crude on the spot market, as current spot crude prices are often higher than their refined product selling prices.

'According to our calculations, even if the pace of inventory drawdown accelerates to over 1 million barrels per day, China's commercial reserves alone could last for another six months,' she said. (Editor: Zhu Jianling / Zhou Huiying) 1150612