Now Reading: China cuts crude imports, balances Asia demand as Iran war tightens supply
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China cuts crude imports, balances Asia demand as Iran war tightens supply
China cuts crude imports, balances Asia demand as Iran war tightens supply
China has slashed its crude imports to offset the disruption from the Iran war, with arrivals in July at 8.41 million barrels per day (bpd), still 24.3% below last year but up…
The Story in Brief
China has slashed its crude imports to offset the disruption from the Iran war, with arrivals in July at 8.41 million barrels per day (bpd), still 24.3% below last year but up from June's near-decade low of 7.12 million bpd, the Economic Times reports. The war, which began with US-Israeli strikes on February 28, effectively closed the Strait of Hormuz, cutting off about 20% of global crude flows.
Asia's total July imports were 22.82 million bpd, down about 4 million bpd from the pre-conflict average, according to Kpler data. China's imports averaged 7.78 million bpd over June-July, 4.21 million bpd below the pre-war three-month average. Analysts estimate China's stockpiles at 1.2 billion barrels, allowing it to sustain lower imports, but the effect of August's mild recovery, with Middle East imports rising to 2.71 million bpd, remains key.
The Indian Opinion
The narrative that China is the sole 'balancing force' for Asia's oil demand should be weighed against the massive strategic stockpiles it holds, which let it absorb supply shocks without panic buying. The real test will be September, when Middle East flows are expected to drop again after the ceasefire collapse. Will Chinese refiners continue dipping into inventories, or will they pay a premium for non-Middle East cargoes? That number will show whether Beijing is really doing 'heavy lifting' or just managing its reserves smartly.
Source: economictimes.indiatimes.com
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