Crude oil imports by China in May drop to a four-month low due to extensive refinery maintenance nationwide.

Going against the grain, China's crude oil imports take a dip in May

Hold onto your hats, folks, because things are about to get a little bumpy in the land of the dragon. Data released on Monday, unveiled China's crude oil imports diving to a four-month low, bucking the trend we've grown accustomed to.

In May, China, the world's largest crude oil buyer, chugged along with a daily rate of 10.97 million barrels- a drop of 3% from April's totals and a 0.78% slide compared to May 2024. The figures, provided by the General Administration of Customs, revealed somewhat of a surprise as imports amounted to 46.6 million metric tons.

But don't start worrying just yet; the long-term picture is looking decent. Over the first five months of 2025, China's total imports clocked in at 11.1 million barrels per day, demonstrating a 0.3% increase from the same period last year.

So, why the sudden dip in May? Well, it turns out that refineries were busy with some much-needed routine maintenance, which, of course, impacted their oil purchases. The work affected a combined refining capacity of around 2.6 million barrels per day, according to Oilchem.

"It's par for the course for the peak maintenance season in China," explains Muyu Xu, Kpler's senior crude oil analyst. "Refineries intentionally slashed their purchases. Moreover, prices were on the higher side, so long-term contract volumes were slashed, and Iranian oil arrivals were pretty low."

But fear not, the tide might be turning come June. Muyu Xu predicts the volume of long-term contract barrels from the Middle East set to increase considerably, and imports from regions like Brazil could also see a rise. However, Iranian crude imports may stay close to their May levels, Xu added.

As for China's refined fuel exports, they took a tumble in May, plunging by 17.62% compared to the same period last year. Meanwhile, natural gas imports, including piped gas and liquefied natural gas (LNG), experienced a 10.8% decline year-on-year, the data showed.

Imports of spot LNG remained stagnant, as Asian prices hovered above $11/mmBtu, a price deemed too steep for Chinese buyers given ample domestic supplies and weaker-than-expected industrial consumption.

Now, the question is: Why are we expecting a rebound in June? Here's where it gets a bit murky, as the data doesn't explicitly state the reasons for the anticipated bounce-back. However, potential factors could include improving trade talks with the U.S., sustaining demand, or growing imports from regions like Saudi Arabia[1][5]. For a definitive answer, more specific data or forecasts related to China's energy demand and import policies would be required[2].

The decline in China's crude oil imports in May may not be a long-term trend, as the index for long-term contract barrels from the Middle East is expected to increase significantly in June, according to Kpler's senior crude oil analyst Muyu Xu. Additionally, the Ira (Iran) oil imports, which were low in May, might stay around the same level in June, while traders might see a rise in imports from regions like Brazil. The weather in China may also contribute to the predicted rebound, as warmer temperatures could lead to increased industrial consumption and demand for natural gas.

Crude oil imports by China in May drop to a four-month low due to extensive refinery maintenance nationwide.