Crude oil: China's demand is growing in the post-epidemic era

February 9, 2023

TDD-global

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Highlights at a glance

China continues to be a major driver of global crude oil demand with a growth rate of 6.3% over the past 30 years. Despite the pandemic's impact on economic activities, confidence in China's oil demand recovery is high. The IMF anticipates notable growth in 2023, although changes in import and export quotas reflect current inventory pressures.

China is the engine of the growth of global crude oil consumption. The average growth rate of China's crude oil consumption in the past 30 years is 6.3%, which is far higher than the global average of 1.04%. Since its own production is far from enough to meet the demand, China's dependence on crude oil imports is more than 70%.

After the release of epidemic control, the first wave of infection caused a serious impact on China's economic activities in December. The three major PMIs fell to the lowest level since March 2020, and terminal demand was sluggish. Last year, the decline in travel restrained the demand for gasoline and kerosene, while the trend of diesel oil was different from the former two.

In the post-epidemic era, the international market has great confidence in the demand for Chinese crude oil. The IMF expects that China's economic growth will "stand out" in 2023. However, in the first quarter of 2023, the import quota of crude oil decreased and the export quota of refined products increased, reflecting the domestic inventory pressure of crude oil and refined oil. It is optimistic that China's demand will recover substantially by the second quarter.

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