Page 8 - AsianOil Week 37 2022

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Chinese oil use plummets for

first time in 20 years

PIPELINES & CHINA is expected to post its first annual Year, which in 2023 will be centred around the
TRANSPORT decline in oil use in over two decades this year new moon on January 22, will have to buck the
with the plummeting numbers equating to a trend of between 500mn and 1bn Chinese opting
Coronavirus lockdowns drop of around 380,000 barrels per day (bpd). not to travel over the summer vacation period,
have eaten into oil A year earlier demand for crude oil in China and most also choosing to stay put during the
demand. increased by 5.6%, equal to around 450,000 bpd. early September Mid-Autumn Festival.
Reasons for the fall in oil use across China At present there are no indications that exist-
vary according to official sources, but in large ing government regulations will even permit
part have been attributed to long-running this, despite the wishes of the general populace.
nationwide coronavirus (COVID-19) lock- Road, rail and air travel bookings, made months
downs and strict travel restrictions over holiday in advance, are all much lower than in recent
periods. years.
Lockdowns in the financial capital of the Calling the first anticipated drop in oil
nation, Shanghai, and the centre of government, demand in China since 2002 a “watershed
Beijing, had already sent demand for crude moment”, Sun and other analysts indirectly lay
plummeting during the second quarter of the much of the blame at the feet of the national
year, before the central government began to government.
enforce a ‘zero-COVID’ policy that has left the Overseas too, the effects of China’s COVID
economy reeling. policies are causing concern, with the Interna-
As the world’s second-largest economy, but tional Energy Agency (IEA) this week saying
biggest consumer of energy, crude import fig- that reduced oil demand in China is being offset
ures for the January-August time frame have by a number of countries now opting for crude
already seen overall numbers drop by 4.7%, to over gas imports to avoid rising gas prices.
just over 9.92mn bpd. As a result, worldwide oil demand for the year
Yet while imports in August alone averaged is only slightly down from the 2021 forecasts of
out at 9.35mn bpd, around 500,000 bpd up on 2.1mn bpd to 2mn bpd.
July, the figures are still down by slightly over Somewhat ambitiously, the IEA in its Paris
1.1mn bpd on the same month in 2021. HQ has even suggested that demand in 2023
Even the traditional benchmark operations at could return to pre-COVID levels, albeit with
China’s independent ‘teapot’ refineries, through the caveat that this needs Beijing to give the
which around 20% of all crude is imported, are green light on opening up China again.
also being stifled as the authorities continue Throughout China, meanwhile, and adding
investigations into tax irregularities. to longer-term concerns, COVID lockdown
Some analysts do expect a rebound early in enforcement in some areas of the country has
the new year, however. now reached levels deemed hysterical in local
“We believe imports will only rise substan- and overseas media.
tially in early 2023, when China begins to source So much so that scenes of stray animals and
crude for the Lunar New Year, rather than our even fish in lakes being tested for the virus, and
previous expectation of the fourth quarter of a single case leading to hundreds of thousands
2022” Sun Jianan of Energy Aspects said. locked in their homes for weeks on end, are not
If Sun proves to be correct, the Chinese New unusual. ™

P8 www. NEWSBASE .com Week 37 19•September•2022