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China's crude oil imports fell 24 percent year-on-year to 7.8 million tons in January, the first fall in more than two years, according to analysts and sources from the General Administration of Customs Thursday.
Industry analysts attributed the slump to hefty year-end stockpiles, the high crude price rate on the current international market and factors that might block crude oil transportation.
Due to the high level of crude production and imports last year, China currently has stocks of more than 20 million tons of crude oil, according to industry sources.
"The country's oil refiners will be able to draw on the crude stock to support its operation for a period of time," said Zhang Jian, an oil industry analyst with the Beijing-based China Securities.
Zhang also hinted the current resurging crude oil price on the international market might prompt domestic crude buyers to think twice before placing more orders.
"The international crude oil price stands at more than US$50 per barrel, which is expected to drop in a couple of months - in March or April," said Zhang.
"But the price fall will be slight, and oil refiners should not expect too much of that," said an analyst from the Petroleum Economics & Technology Research Centre under PetroChina, the country's second-largest refiner.
The PetroChina analyst said another factor leading to the January crude oil import decline is the transportation obstacles.
"Difficulties might arise to hobble transportation during the winter," he said.
But the monthly decrease in crude imports does not signal an overall trend of falling imports for the year, said industry experts.
The country's demand for crude oil this year will remain strong, some 40 percent of which is expected to come from imports, they said.
"The country will need another 30 million to 40 million tons of crude oil this year," said the PetroChina analyst.
China Securities' Zhang predicted the oil production this year is expected to rise by more than 10 million tons to reach over 180 million tons.
The world's second-largest oil consumer last year devoured some 300 million tons of crude oil, with 123 million tons coming from imports, according to industry sources.
China is expected to increase its oil production this year, as a number of offshore oilfields are expected to go into operation, said Zhang from China Securities.
"Some offshore oilfields by China National Offshore Oil Corp (CNOOC) in the Bohai Sea and South China Sea are expected to become operational this year, which will greatly expand its oil production capacity," said Zhang.
Oilfields in western China's Shaanxi Province and the Xinjiang Uygur Autonomous Region will also increase their production, said analysts.
"Despite the production growth, imports, obviously, will still play an important role in meeting demand," said Zhang.
The country imported as much as 10.3 million tons of crude oil last January, and 12.1 million tons last December, according to industry statistics.
(China Daily February 25, 2005)
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