China’s crude oil imports jump to new record high in November

Chinese crude oil imports surged to an all-time high of 10.43 million bpd (barrels per day) last month, up by 8.5 percent compared to November 2017 and beating the previous record of 9.61 million bpd, which was set just a month earlier and was driven by smaller independent refiners who were rushing to fulfill their 2018 oil import quotas before they expire.

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In November, independent refiners – the so-called teapots – continued to buy high volumes and some of them increased intake as they start trial runs at newly-built oil refineries.

Private firm Hengli is planning trials at its new 400,000 bpd refinery at Dalian, a port city in northeastern China, while Zhejiang Petrochemical is also expected to begin trial runs at some units of its refinery with 400,000 bpd capacity at Zhoushan. According to Reuters, Zhejiang Petrochemical has imported several cargoes of crude oil from Oman this quarter.

Two months ago, China raised by 42 percent the oil import quota for its non-state refiners—most of which are the independent refiners—for 2019 as new refinery capacity is planned to enter into operation next year. China is allocating a total of up to 202 million tons, or 4.06 million bpd, of import quota to non-state refineries for next year, according to S&P Global Platts. Independent refiners had until November 10 to apply, and those who haven’t imported crude oil in 2018 will not be allocated quotas for next year.

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This weekend, Chinese customs data also showed that crude oil imports between January and November averaged 9.17 million bpd, higher than the level of imports in the same period last year, and putting China on course to set a new record for crude oil imports in 2018. 

This article was originally published on Oilprice.com