China's Oil Demand Shock Raises Questions Over Long-Term Import Trends

China's crude oil imports have fallen from a five-year average of approximately 11.5 million barrels per day (bpd) to around 8 million bpd since April, reaching roughly 40% of pre-conflict levels in June.

According to market analysts, the decline has coincided with supply disruptions in the Middle East, helping to offset part of the upward pressure on global oil prices despite ongoing geopolitical tensions.

Long-term demand outlook remains uncertain

"There is a massive level of uncertainty because we don't fully understand what has happened," said Michal Meidan, Head of China Energy Research at the Oxford Institute for Energy Studies.

Some analysts estimate that China's crude demand could remain 1–2 million bpd below pre-conflict levels over the longer term, although future trends remain uncertain.

Structural factors influencing demand

Transport electrification

Sales of electric and hybrid vehicles accounted for a record 62% of new passenger vehicle sales in June, although about 87% of China's vehicle fleet still uses gasoline-powered engines.

Industrial activity

China's property-sector weakness continues to weigh on diesel consumption, while slower economic growth could also affect demand for petrochemical products.

Strategic stockpiling

Analysts at Sparta Commodities noted that China could resume strategic crude stockpiling if market conditions become favorable. They also observed that Brent crude prices below US$70 per barrel were associated with previous stockpiling activity.

Market focus

Market participants continue to monitor China's fuel export quota policy, as future adjustments could influence refinery operations and crude import demand in the coming months. China eased export restrictions for July, while subsequent policy decisions may depend on domestic market conditions and geopolitical developments.