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August 02, 2023
By Tsvetana
Paraskova
Chinese Oil Demand In 2023 May Have
Already Peaked
![](images/images_08_03_2023/2023-08-02_0hhzeftx4u.jpg)
Chinese oil demand for this year may have already peaked and could
ease this quarter amid China’s continued struggles to significantly
boost its economy after ending the Covid restrictions, analysts have
told Bloomberg.
The prospect of weaker oil demand growth in the world’s largest crude
importer is bad news for oil market bulls.
Chinese oil demand for 2023 likely peaked at 16.4 million barrels per
day (bpd) in the second quarter, Jianan Sun, an analyst with Energy
Aspects, told Bloomberg. This quarter, demand is set to decline to
15.8 million bpd, before rebounding to around 16.2 million bpd in the
fourth quarter, according to Energy Aspects.
China, however, has returned to importing near-record monthly volumes
of crude as it has accelerated
stockpiling. The country is estimated to have made in June the
largest monthly additions to inventories in three years. Cheap Russian
crude played a large part in the high level of stockpiling last month,
as China accelerated buying of Russian cargoes to benefit from the
discounts at which Russian grades are being offered on the market
relative to the crude from other sources, including from the Middle
East.
While cutting its global demand growth estimate for 2023 for
the first time this year, the International Energy Agency (IEA)
noted last month that Chinese demand growth continued to surprise to
the upside. China is expected to account for 70% of the global oil
demand growth this year, which was expected at 2.2 million bpd in
IEA’s monthly report for July, down from 2.4 million bpd expected in
the June report.
A 3-million-bpd global demand
surge in May compared to April was largely driven by soaring
demand in China, India, Saudi Arabia, and the United States, the
latest data by the Joint Organizations Data Initiative (JODI) showed
last month.
China’s total oil product demand hit
17.37 million bpd in May, the JODI data showed. This was an
increase of 1.7 million bpd compared to April, and the second-highest
level ever reported in JODI.
Other Chinese oil data also pointed to strong demand—crude oil imports
jumped by 1.8 million bpd to 12.15 million bpd in May, while refinery
intake surged by 1.81 million bpd to 16.38 million bpd.
By Tsvetana Paraskova for Oilprice.com
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