Eight out of ten major suppliers of oil to PRC were able to increase their volumes exported to China. It includes Russia (+23%, i.e., 400 thou bbl/d), Saudi Arabia (+7%, i.e., 130 thou bbl/d) and Brazil (+49%, i.e., 450 thou bbl/d). At the same time, in June 2023, Russia achieved the record high monthly supplies of oil to PRC (2.6 mln bbl/d), which was never registered by the customs statistics before. On the other hand, oil supplies from Malaysia to PRC during the first half of 2023 grew by 46% (by 330 thou bbl/d) reaching 1 mln bbl/d, exceeding the volumes produced by Malaysian companies. In all appearances, the growth of oil supplies from Iran is manifested, and they are organised in two stages. According to S&P Global Platts, tankers with the switched-off navigation transponders first shuttle between Iran and Malaysia, where the board-to-board transshipment of oil takes place, and after that the feedstock goes to China.
The dynamics of oil production in Iran indirectly testifies that. In January 2023, the production there made 2.55 mln bbl/d, and in August 2023 it grew up to 2.9 mln bbl/d, i.e., to the maximum level since November 2018, when the USA introduced the first round of embargo. However, the geography of Iranian export remains rather narrow. According to Kpler, in the current year, supplies to China accounted for 91% of Iranian export, and the other 9% went to Syria (7%) and Venezuela (2%), while as in 2023, the top three importers were China, India and South Korea cumulatively accounting for 58% of supplies.
Overall, the growth of oil import to PRC is one of the indicators of the growing demand, which continues its recovery after COVID-19 pandemic due to, among other things, lifting the restrictions in the aviation transportation segment. In December 2022, passenger traffic at the domestic civil flights in China was lower vs December 2019 by 55.5%, and in July 2023, it exceeded the pre-crisis level by 22.5%. Another driver of the domestic demand was commissioning of new refineries. In November 2022, Shenghong Petrochemical company commissioned a new refinery processing 320 thou bbl/d in Jiangsu province, and in February 2023, PetroChina commissioned a new refinery processing 400 thou bbl/d in Guangdong province.
