China significantly increased oil imports in May amid a recovery in demand. Exports of Chinese petroleum products have fallen since the beginning of this year, despite the high profitability of processing. LNG supplies to the country are declining. Russia is systematically increasing the export of natural gas to China by the “Power of Siberia”.

According to the General Customs Administration of China, in May, oil imports to the country increased by 12% year-on-year, reaching 45.8 million tons (10.79 million barrels per day). In April, Chinese companies purchased 10.5 million barrels per day abroad. Last year, the average daily volume of supplies to the country, which is the largest importer of energy in the world, amounted to one million barrels per day.

In January-May of this year, oil imports amounted to 217 million tons (10.49 million barrels per day), which is 1.7% less compared to the same period a year earlier.

At the end of the first quarter, demand for petroleum products in China’s domestic market declined due to restrictions imposed after the coronavirus outbreak. Severe restrictions have been imposed in a number of major provinces and cities in China, including Shanghai and Beijing.

In addition, due to the rapid rise in oil prices at the beginning of the year, Chinese oil refiners used reserves accumulated in 2020 in commercial and strategic storage facilities. Chinese authorities have allowed state-owned refineries to use raw materials from strategic storage facilities in order to curb the rise in prices for oil supplied from abroad.

In 2020, after the collapse of prices in the energy market associated with the coronavirus pandemic, Chinese state-owned companies began buying cheaper oil around the world. The volume of oil imports significantly exceeded the capacity of Chinese refineries. As a result, commercial and strategic oil reserves in China exceeded 1 billion barrels.

According to Vortex Analytics, a company that monitors Chinese oil reserves, there are currently 920 million barrels in the country’s storage facilities. This volume is enough to meet the needs of Chinese refineries for two months.

Due to the restrictions imposed on the domestic market, the demand for petroleum products decreased, which caused a decrease in the loading of Chinese refineries in March and April. However, in May, independent refineries located in Shandong Province significantly increased production volumes. According to the Chinese consulting JLC, last week their load exceeded 60%. In April, this figure was less than 50%.

Refining volumes are expected to continue to grow in June due to the completion of planned repairs at large refineries in Shandong Province owned by Chinese state-owned companies. These plants are major consumers of Russian ESPO grade oil, which is shipped at the Kozmino terminal on the coast of the Sea of Japan. Kozmino is the terminus of the Eastern Siberia — Pacific Ocean (ESPO) trunk pipeline.

After the start of the special operation in Ukraine, South Korea, Taiwan and Japan refused to buy Russian oil. According to Western sources, Chinese companies are now buying all the oil in Kozmino.
The Main Customs Administration of the People’s Republic of China also reported a 40% reduction in oil products exports from China in May compared to May 2021 — up to 3.27 million tons. In January-May, exports of all types of petroleum products decreased by 38.5% year-on-year.

Despite the high profitability of refining due to the increase in demand for motor fuel in the world, the Chinese authorities restrict the export of petroleum products in order to prevent excessive demand from independent refineries, since the technical equipment of some of them does not allow for deep processing and production of motor fuel that meets modern environmental requirements.

According to Reuters, this week the Chinese authorities provided quotas for the export of petroleum products in the amount of 4.5 million tons in order to reduce stocks that have accumulated due to restrictions imposed due to the outbreak of coronavirus after the appearance of the strain “omicron”.

On June 1, Beijing announced the lifting of many coronavirus restrictions in Beijing and Shanghai. In this regard, Chinese experts hope for an acceleration of economic growth in the second half of the year.

In May, natural gas supplies — via pipelines and in the form of LNG — amounted to 9.07 million tons. In January-May of this year, natural gas supplies to China decreased by 9.3% compared to the same period in 2021 — to 44.91 million tons (approximately 62 billion cubic meters).

The reduction in natural gas imports is due to a reduction in the supply of more expensive LNG. In addition, China is seeking to reduce dependence on LNG supplies from Australia. The already complicated political relations between the two countries worsened after Washington created the AUKUS bloc, which included Australia and the United Kingdom in addition to the United States. Last year, Australia accounted for over 39% of the total volume of LNG imported by China.

Western experts predict that Beijing may reduce LNG imports this year by 19% compared to 2021 — primarily from Australia.

Last year, China became the world’s largest importer of LNG in the world. LNG imports into the country reached a record high of 78.9 million tons.

Despite the expected decline in LNG imports, pipeline gas supplies to the Chinese market will continue to grow. Turkmenistan will remain the main supplier. Russia will continue to increase gas exports to China via the Power of Siberia pipeline in accordance with a long-term agreement between Gazprom and China’s CNPC. In 2021, deliveries via the “Power of Siberia” reached 10.4 billion cubic meters, and this year they should reach 15 billion.

The ability to import Russian gas through the “Power of Siberia” is of great importance for Beijing in connection with the plans of Kazakhstan and Uzbekistan to completely abandon the export of natural gas to China.


The Customs Department of China has published detailed statistics on foreign trade, which shows a sharp increase in imports of Russian energy carriers in March 2022.

According to the published data, China received $4.58 billion worth of crude oil from Russia in March this year. A year earlier in March, this amount amounted to only $ 3.53 billion, that is, an increase of 29.7%.

Imports of Russian gas have grown even more noticeably in China. If in March 2021 the cost of the supplied liquefied gas amounted to $ 120 million, and natural gas — 98 million, now goods for $ 240 and 260 million were issued for these items. accordingly.

In addition, the cost of coal imported from Russia has increased significantly: the same as for crude oil, the growth was 29%, in money x — 563 million dollars for March 2022.

In general, all goods in the category “Mineral fuel, oil and products of their distillation” were shipped from Russia to China in March for $ 5.97 billion. This is immediately 40% more than a year earlier.