China dipped into its crude oil stockpiles for the first time in 18 months during the January-February period as refiners processed more oil than was available from imports and domestic production.
Refinery throughput exceeded crude availability by approximately 30,000 barrels per day (bpd), according to calculations based on official data from the National Bureau of Statistics (NBS).
Crude Oil Processing vs. Imports
In the first two months of 2025, Chinese refiners processed 14.74 million bpd, marking a 2.1% increase from the same period in 2024. Meanwhile, crude imports dropped 5%, totaling 10.37 million bpd, with domestic production at 4.34 million bpd. The combined total of 14.71 million bpd was slightly below the volume processed, prompting refiners to tap into reserves.
China does not disclose official data on crude stockpile movements, but estimates are derived by subtracting total crude processed from the sum of imports and domestic production.
Decline in Imports and Market Factors
The decline in crude imports can be attributed to two key factors:
- Chinese refiners reduced purchases of Russian oil after the outgoing U.S. President Joe Biden imposed new sanctions in January on tankers carrying Russian crude.
- Refiners hesitated to replace Russian supply due to the high global oil prices in January and February.
Benchmark Brent crude futures peaked at $82.63 per barrel on January 15, following a steady rise from $70 in December 2024.
China’s Refinery Strategy and Oil Pricing
Chinese refiners have a history of reducing imports when global oil prices rise too sharply. The last time China dipped into strategic reserves was in September 2023, after crude prices surged from $72 per barrel in June to a 10-month high of $96.26 per barrel on September 29, 2023.
“Given the strength of global crude prices, refiners opted to minimize imports rather than pay a premium for shipments,” said an industry analyst.
Looking Ahead
With China’s top priority being energy security and economic stability, refiners are expected to closely monitor oil price trends before making adjustments to their import strategy.
