China Ramps Up Crude Oil Imports Amid Price Opportunities And Trade War Tensions
GerikSummary:
Chinese refiners are accelerating crude oil imports to capitalize on low prices, despite long-term economic risks from the U.S.-China trade war, with March imports reaching the highest level in 18 months...
Short-Term Profit Strategy Overrides Long-Term Trade War Concerns
Chinese refineries are strategically ignoring the broader economic uncertainties stemming from the U.S.-China trade war to seize short-term gains from falling crude oil prices. According to Kpler, a leading tanker tracking firm, China’s crude imports surged in March 2025 to an average of 11 million barrels per day, marking an 18-month high and sharply rising from 8.9 million barrels per day in January. This upward momentum has continued into April, highlighting China's aggressive approach to stockpiling inexpensive oil.
Shifts In Sourcing Strategy Amid Global Price Volatility
Initially, China's increased imports centered on Iranian oil amid concerns over tighter U.S. sanctions. However, following President Donald Trump's tariff threats and rising production from OPEC members, global oil prices plunged to a four-year low. Chinese refiners rapidly shifted tactics, broadening their purchasing efforts to secure a wider range of discounted crude.
The relationship between the escalation of tariffs and China's accelerated crude accumulation is primarily correlative. Tariff risks contribute to broader market volatility, which in turn depresses oil prices, presenting Chinese refiners with an attractive buying window.
Market Projections And Analyst Insights
While Brent crude prices later rebounded to over $65 per barrel by the end of last week, Morgan Stanley warned that persistent downward pressures could pull prices to an average of $62.5 per barrel in the second half of the year.
Giovanni Staunovo, an oil analyst at UBS, emphasized China's extreme sensitivity to price fluctuations, predicting that import volumes in April would likely surpass March's figures. Johannes Rauball from Kpler further noted that China's strategic reserves remain relatively low, suggesting strong import demand will persist regardless of domestic consumption trends.
Operational Adjustments At Chinese Refineries
Despite predictions that a slowing Chinese economy would weaken oil demand in the latter half of the year, current fuel consumption for transportation and aviation remains robust. Emma Li, an analyst specializing in energy markets, revealed that several Chinese refineries have postponed scheduled maintenance to sustain fuel production while profit margins remain attractive due to low feedstock costs.
Official data shows that Chinese refineries processed 14.85 million barrels per day in March 2025, a 0.4% year-on-year increase. Notably, during the first two months of the year, refinery output exceeded the combined total of domestic production and imports by about 30,000 barrels per day, indicating the first drawdown of strategic reserves in 18 months.
Geopolitical Constraints On Iranian Oil Purchases
Although China remains the world’s largest crude importer and a major buyer of oil from sanctioned markets such as Russia, Iran, and Venezuela, tensions have recently impacted Iranian supply routes. After U.S. sanctions targeted a Shandong-based refinery for purchasing Iranian oil, Chinese importers scaled back Iranian crude purchases from a record 1.8 million barrels per day in March to 1.2 million barrels per day in April.
Rauball explained that logistical challenges and caution among independent Chinese refiners have contributed to an increase in crude stocks stranded at sea. Kpler data reveals that approximately 40 million barrels of Iranian oil are currently sitting on 36 vessels, with concentrations near Singapore, the Yellow Sea, and the South China Sea.
Private Refiners' Resilience Amid Sanctions
Despite these hurdles, Chinese private refiners are unlikely to fully retreat from Iranian crude. With razor-thin profit margins, discounted Iranian oil remains essential for their survival. Rauball pointed out that many private refiners operate outside the reach of the U.S. financial system, rendering American sanctions less effective.
In this case, the connection between oil supply chains and financial system autonomy becomes evident. While regulatory risks increase, the strategic importance of low-cost Iranian oil in maintaining refinery profitability leads private players to sustain their engagement, even under external pressure.
Source: Kpler
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