China is set to build on its dominant position when it comes to crude oil imports, according to the latest weekly report from UK broker Gibson.
Earlier this month, figures confirmed the rise of China as the world’s largest importer of crude oil ahead of the Unites States. Data shows that for the first time China averaged 8.55m barrels per day (b/d) of crude oil imports in the first half of 2017 compared with 8.12m b/d imported by the United States.
“This trend looks set to continue as China develops its refining industry and builds strategic petroleum reserves. However, other factors play a role,” Gibson stated. The broker went on to look at how China’s domestic crude production has been in decline, down 5.1% in the first half this year.
Moreover, China continues to prioritise the building of strategic petroleum reserves (SPR).
“It is assumed that China will continue to build their SPR for years to come with the IEA highlighting 2020 as a tentative completion date, with 182m barrels of storage space yet to be commissioned,” Gibson reported.
According to a recent presentation from Sinopec, China plans to add 2.5m b/d of refining capacity by 2020, supporting growth in Chinese oil imports into the future.
“Evidently, China will continue to have an ever greater role in the global oil market and continue to cement its position as the world’s largest crude importer. Due to declining domestic production and refinery expansions this should prove positive to tanker demand in years to come,” Gibson concluded.