After a slow start to 2020 due to a pandemic, China’s refineries have ramped up production from April on the back of ultra-low crude oil prices and a revival in the Chinese economy and fuel demand, setting a new record for crude processing oil.
Crude oil throughputs in China’s refineries averaged 674.41 million tonnes, or 13.51 million barrels per day (bpd) in 2020, up 3.2 percent from the previous year to record high throughput, according to data from the National Bureau of Statistics quoted by Argus.
Last year, when international crude oil prices fell in March, April and most of May, Chinese refineries took advantage of the lowest prices in years and stockpiled low-priced crude oil. For several months, China broke crude oil import records over the summer, and tankers had to wait weeks to unload the crude as port congestion intensified.
Several new refining units also contributed to China’s record high crude oil processing rates in 2020, as well as the higher import quotas the government has given independent refineries – so-called teapots.
According to data from China’s statistics bureau, cited by Argus, Chinese refineries reduced crude oil throughput between January and March, with production dropping 6.6 percent year over year in March. In April, however, refineries began to ramp up crude oil processing, which hit a daily record in November of 14.2 million barrels per day, 3.2 percent more than in November 2019. The refinery’s average throughput in December was just a little lower – at 14.18. million bpd, it remained close to November’s record levels, according to Argus estimates.
Chinese crude oil imports also rose to an all-time high averaging 10.85 million barrels per day in 2020, up 7.3 percent, thanks to cheap crude oil and the start-ups of several refineries.
For most of last year, solid demand in China single-handedly supported the oil market, while demand in Europe and the United States was on the wane due to a resurgence of COVID-19 cases.
By Tsvetana Paraskova for Oilprice.com
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