Analysts: China heads for record crude oil imports in 2023‎

Analysts expected that China would import record quantities of crude oil in 2023, supported by the growth in demand for fuel, after the increase in movement and travel, following the abolition of anti-Covid-19 restrictions and the operation of new refineries.

According to “Reuters”, prospects for strong demand from the world’s largest importer will represent another bullish factor for the oil market, in which prices are already receiving support from the OPEC + group’s production cuts and Western sanctions on Russian exports.

Analysts from four consulting firms in the oil sector, namely Wood Mackenzie, (FGE), Energy Aspects and Standard & Poor’s Global Commodity Insight, said that China’s crude imports may rise by between 500 thousand and one million barrels per day this year to 11.8 One million barrels per day, retreating from a decline in the past two years, and exceeding the record recorded in 2020 at 10.8 million barrels per day.

These estimates are in line with the latest forecasts issued by the International Energy Agency

Demand for gasoline and jet fuel has soared in China since anti-Covid restrictions were lifted in December

Sun Jianan, an analyst at Energy Aspects, believes that gasoline and jet fuel will account for about 50 and 30 percent, respectively, of the total growth in demand for liquid fuels. He added that aviation fuel consumption will reach 90 percent of pre-pandemic levels by the end of 2023.

“Economic stimulus, along with infrastructure expansion in 2023, will pave the way for a strong recovery in diesel consumption,” said Wang Cui, an analyst at Standard & Poor’s Global Commodity Insight.

With the increase in domestic consumption and the presence of profitable export markets to supply it, the four consulting firms believe that Chinese refineries will increase crude processing capacity by between 850 thousand barrels per day and 1.2 million barrels per day over 2022 levels, representing an increase of between six and nine. percent.

Last year witnessed the first annual decline in the capacity of Chinese refineries since 2001

However, with all these optimistic factors, analysts also indicated some reasons and opposite factors that call for caution regarding demand expectations.

Analysts said that among these factors is that consumers remain concerned about the state of the Chinese economy, especially in the short term, the prospects for a global economic slowdown that may put pressure on China’s export sector, the possibility of a resurgence of Covid-19 infections, and the ambiguity surrounding Beijing’s policy related to fuel exports.