China Cuts Oil Imports to Lowest Level Since 2017

The Government of China reduced crude oil imports in May to approximately 7.8 million barrels per day, the lowest level since October 2017. This represents a nearly 30% decrease from the previous year's daily average of 11.6 million barrels. The decline was triggered by a price spike and supply disruptions caused by the war in Iran and the near-closure of the Strait of Hormuz, as well as stricter U.S. sanctions on Iranian crude.

To maintain domestic fuel supplies and stabilize global prices below $100 per barrel, Beijing drew down its strategic petroleum reserves, estimated at over 1 billion barrels, and reduced refinery processing rates. These efforts were supported by the Federal government of the United States, which increased crude exports to more than five million barrels per day during April and May.

Structural shifts have further lowered demand. The Ministry of Transport of the People's Republic of China reported a rise in rail travel and a decline in air passenger traffic, while the National Energy Administration noted a surge in highway EV charging. Additionally, a five-year property sector crisis has dampened diesel demand for construction. Sinopec, the world's largest refiner, expects national demand for gasoline, diesel, and jet fuel to fall by roughly 10% year-on-year during the second and third quarters of 2026.