China’s crude imports climbed to a record last month as a drive to stock up on Iranian oil before exemptions from U.S. sanctions expired on May 2 offset the effect of maintenance shutdowns by local refiners.
- China imported 43.73 million tons of crude in April, or 10.68 million barrels a day, according to Bloomberg calculations based on data from General Administration of Customs in Beijing. That’s the most in figures going back to 2010.
Key Insights
- The record purchases are mostly due to large volumes of Iranian oil arriving in China before the expiration of the waivers, according to Michal Meidan, an analyst with London-based industry consultant Energy Aspects Ltd. An estimated 1.7 million barrels a day of refining capacity was taken offline for maintenance in April, the most during the March-May peak season.
- The start-up of a mega refinery at Dalian by Hengli Group also boosted imports, according to Li Li, an analyst at Shanghai-based commodities researcher ICIS-China.
- While no country-by-country breakdown of the Chinese figures for April is available yet, observed crude exports from Iran to China rose to 806,452 barrels a day in March, the highest in six months, according to tanker-tracking data compiled by Bloomberg.
- It normally takes 22 days for Iranian cargoes to arrive in China, so shipments are likely to drop significantly for May arrivals as observed exports from the Islamic Republic fell 67 percent in April from March.
