China's oil imports continue to decline as volumes in May hit an eight-year low

China's crude imports in May fell 29%, to the lowest level?in 8 years. This is a continuation of a sharp drop that has been seen by the world's largest oil importer.

Customs data on Tuesday showed that imports fell to 33.08 millions tons or 7.79 billion barrels per day - the lowest since February 2018.

Imports in April fell to a multiyear low of 9.3 millions bpd. Chinese refiners had to draw on their reserves to compensate for a?even greater decline than the average of 11million bpd before the U.S. and Israeli war?on Iran.

The Strait of Hormuz is closed, and the oil shortages caused by it are being eased.

China's fuel export restrictions, which cap prices at home, are preventing refiners from accessing lucrative markets.

According to Vortexa, a ship tracking firm, China's oil imports could be around 7 million bpd in the next three month.

The company estimated that imports from Russia and Iran in May fell by 14% and 12% respectively to 2 million and 1.37 millions barrels each day.

As Chinese buyers return the liquefied gas (LNG), imports of natural gas have risen month-on-month, reaching 10.11 million tonnes.

The data does NOT separate LNG from gas piped overland.

Slight Increase in Fuel Exports

Exports of refined fuel rose to 3.37 millions tons in May, up from 3.1million tons in March. However, shipments are still well below pre-war levels.

Beijing controls shipments through quotas in order to supply its domestic market, but recently it allowed some refineries to reduce production, a sign officials are less worried about shortages.

(source: Reuters)