EIA expects continued increases in Chinese imports of crude oil over next two years
Driven by additional refinery capacity, strategic stockpiling, decreased domestic petroleum production, and increased consumption, China surpassed the United States in annual gross crude oil imports last year, the Energy Information Administration (EIA) reported on Friday.
China imported 8.4 million barrels a day (b/d) of crude oil, compared to the 7.9 million b/d imported by the United States. China sourced 56 percent of crude oil imports from OPEC countries, 14 percent from Russia, and 4 percent from Brazil.
“China had the largest decline in domestic petroleum and other liquids production among non-OPEC countries in 2016, and EIA estimates it will have had the second-largest decline in 2017,” EIA stated. “Total liquids production in China averaged 4.8 million b/d in 2017, a year-over-year decline of 0.1 million b/d (2 percent) from 2016, and further declines in both 2018 and 2019 are forecasted in EIA’s January 2018 Short-Term Energy Outlook (STEO).”
China has granted crude oil import licenses to independent refineries in the country’s northeast since 2015. And refinery runs increased by an estimated 0.5 million b/d in 2017 due largely to two refinery expansions in the latter half of the year.
“Ongoing infrastructure expansions will likely contribute to further increases in China’s crude oil imports,” EIA reported. “In January 2018, China and Russia began operating an expansion of the East Siberia-Pacific Ocean (ESPO) pipeline, doubling its delivery capacity to approximately 0.6 million b/d. According to trade press reports, as much as 1.4 million b/d of new refinery capacity is planned to open in China by the end of 2019. Given China’s expected decline in domestic crude oil production, imports will likely continue to increase over at least the next two years.”
