May crude oil imports
China’s crude oil imports were the second-highest ever in May 2017. Its highest crude oil imports came in March 2017 at ~9.2 MMbpd (million barrels per day). May’s total crude oil imports came in at 37.2 million tons—15.4% higher than during the same period last year.
On a daily basis, the country’s May imports totaled ~8.8 million barrels per day, which was 5% higher than in the previous month.
Why imports increased
For several months, China’s oil imports were getting a boost, mainly due to its teapot refineries. However, in May 2017, the increase in oil imports was coming mainly from state-owned refineries. These refineries were capitalizing on higher refining margins amid low crude oil prices.
According to analysts, China’s efforts to fill its strategic petroleum reserve also contributed to May’s higher crude imports.
The future of crude oil in China
China’s crude oil imports are expected to remain strong and keep rising. Recently, the Chinese government issued additional crude import quotas to local refineries, both private and government-operated.
China (FXI) imports most of its oil by sea—by crude oil tankers. Typically, higher crude oil imports mean higher crude oil tanker demand, and higher crude tanker demand translates into higher crude oil tanker rates.
Higher tanker rates benefit crude oil tanker companies like DHT Holdings (DHT), Frontline (FRO), Teekay Tankers (TNK), Tsakos Energy Navigation (TNP), Nordic American Tankers (NAT), Navios Maritime Midstream Partners (NAP), Gener8 Maritime (GNRT), and Euronav (EURN).