The latest data on China’s oil imports is quite optimistic, with November imports increasing 5% year-on-year. Additionally, China is building new storage capacity, so it can continue to buy more crude, instead of demonstrating that its oil demand growth is weakening, as forecasters say. China makes oil demand forecasts uncertain.
FGE NexantECA, for example, recently reported that China’s apparent October demand was revised downward to 14.6 million barrels of crude per day, 570,000 barrels per day less than expected. At the same time, the forecaster, like others, expects the world’s top oil importer to increase its oil purchases next year – because it is reportedly building up a massive reserve of crude.
As a result, Asian oil demand, which FGE NexantECA expects to fall this year by 38,000 barrels per day, will rebound next year, adding 36,000 barrels per day. That will make Asia one of two continents where forecasters expect oil demand to grow next year, while the rest of the world is expected to see a decline.
However, forecasts are uncertain things. Bloomberg reported this week that China’s continued purchases of oil for storage were “masking” a slowdown in oil demand growth driven by the adoption of electric vehicles. Yet China’s latest car sales figures show a 32% annual decline in total car sales during the first week of December, and a 17% annual decline in electric vehicle sales in particular. This suggests that electric vehicle sales, even in China, are not following an uninterrupted upward curve, erasing barrel after barrel of oil demand with each passing day.
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According to Kpler data, China’s stored oil currently exceeds 1.5 billion barrels. Storage capacity, according to Energy Aspects, is 2 billion barrels – and it could be increased by 260 million barrels in 2026, even if actual imports remain flat compared to 2025, according to the forecaster – unless they increase.
“Actual imports could be much higher than our forecast,” especially in the second half of the year, an Energy Aspects analyst told Bloomberg, as the company forecast China’s oil imports next year at 11.4 million barrels per day, flat to 2025. And yet China’s November average was 12.38 million barrels per day as inventories apparently ramped up.
This year, China has stockpiled crude oil at a daily rate of about 1 million barrels. It also built new storage capacities. This year and next, a total of 11 new storage sites will be built across the country, with a combined capacity of some 169 million barrels. According to Citigroup, China will continue to store crude at a rate of 900,000 barrels per day next year, Bloomberg reported, adding that this would be an increase from storage rates of 800,000 b/d since March this year. If we add January and February, the storage rate rises to 990,000 barrels per day.
