The amount of crude oil going into storage in China has declined from 1.42 million barrels daily in June to 530,000 barrels daily in July, suggesting a pick-up in demand, as reported by Reuters’ Clyde Russell.
Refinery rates went up to 14.85 million barrels daily last month, the report also said, which was an 8.9% increase from July 2024, but at the same time, it was a 2% decline from June 2025. The utilization rate at Chinese refineries, however, rose both on an annual and on a monthly basis, reinforcing the perception of an improvement in demand.
Reuters’ Russell noted that China has been building its crude oil inventories since March this year, and although the country does not disclose inventory numbers officially, the Reuters author calculated them at some 980,000 barrels daily for the first seven months of the year.
It was this inventory building that pushed China’s imports of crude oil higher earlier this year, again according to Reuters’ Russell. The note was made in the context of demand prospects and the potentially misleading perception that the growth in imports was driven by improvements in these demand prospects.
China has been the world’s biggest demand drive in oil. This, however, has been changing lately with the influx of affordable EVs and generous government subsidies aimed at stimulating demand for these. LNG trucks have also eaten into oil demand in China and according to some analysts, now electric trucks are joining the oil demand killers in the world’s largest importer.
Now, analysts expect China’s demand growth to peak before 2030 and the country to be replaced by neighbor India as the top demand driver for crude oil. Among the factors, besides EVs, analysts have listed a slower growth rate for the Chinese economy, a shrinking population, and a plateau in car ownership in the world’s largest EV market.
By Irina Slav for Oilprice.com
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