China’s Crude Oil Throughput Soars in H1 2023, Outpacing GDP Growth

China's crude oil throughput surges, outpacing GDP growth, indicating potential for economic recovery. Refineries expected to increase throughput to meet domestic demand and boost oil product exports.

Share:

China’s crude oil throughput surged by 9.9% in the first half of 2023, surpassing GDP growth, as per National Bureau of Statistics data. In order to stimulate the economy, Chinese refineries are anticipated to increase throughput in the second half of the year. This will drive oil product exports and meet domestic demand.

China’s Crude Oil Throughput Surges, Analysts Expect Further Growth to Support Economic Recovery

China’s crude oil throughput surged by 9.9% in H1 2023, surpassing its GDP growth of 5.5% in the same period. This robust growth indicates the potential for a stronger economic recovery. Analysts suggest that Chinese refineries may need to boost throughput in H2 to support slower-than-anticipated economic growth. This move aims to lift oil product exports and satisfy domestic demand.

China’s Q2 GDP growth at 6.3% falls below the estimated 7.3%, indicating a stalled economic recovery. Chinese government implements monetary easing amid limited stimulus potential due to high debt levels.

“China’s widely anticipated reopening has so far failed to extend beyond travel and services, with its economic recovery losing steam after the bounce earlier in the year,” IEA said on its report released July 13.

Market analysts predict that China’s crude oil throughput will continue to rise in the second half of 2023 to meet growing domestic demand. Estimates suggest an increase of approximately 400,000 barrels per day (b/d), pushing the average throughput above 15 million b/d. Factors contributing to this growth include reduced maintenance shutdowns, increased demand for gasoil during the peak season, and potential support from manufacturing goods exports. Additionally, gasoline and jet fuel consumption is expected to rise during the summer holidays.

Crude Oil Throughput Drives Chinese Economic Growth and Boosts Production

Higher crude oil throughput not only addresses domestic demand but also boosts indicators of industrial activity, consequently impacting economic growth. The surplus of oil products resulting from increased throughput can be exported, further strengthening China’s position in global markets. China’s industrial production witnessed a year-on-year rise of 3.8% in H1 2023. This growth, combined with the commissioning of new refineries, such as Shenghong Petrochemical and Guangdong Petrochemical, has contributed to the country’s increased crude oil production.

S&P Global Commodity Insights on July 11 projected China’s real GDP growth at 5.5% in 2023 and to slow to 5.0% in 2024. “The Chinese government has stepped up monetary easing in response to a weakened economic recovery. Additional stimulus measures will likely follow. However, the scale of the new stimulus will likely be limited, partly owing to China’s high debt level. The new stimulus will likely stabilize faltering growth momentum but will not induce a robust recovery, given the deep scarring of the private business sector and households,” S&P Global said.

China’s crude oil output has experienced steady growth in H1 2023, thanks to continuous emphasis on energy security and production commitments from national oil companies such as PetroChina, CNOOC, and Sinopec. In the first six months of the year, China’s crude oil output increased by 2.1% year-on-year, reaching 4.25 million b/d. This significant growth was concentrated in oil blocks located in the Xinjiang region and Bohai Bay. Such concentrated production efforts contribute to China’s overall crude oil supply and support the country’s energy goals.

The private OCP pipeline has resumed operations in Ecuador following an interruption caused by heavy rains, while the main SOTE pipeline remains shut down, continuing to impact oil exports from the South American country.
McDermott secures contract worth up to $50 million with BRAVA Energia to install subsea equipment on the Papa-Terra and Atlanta oil fields off the Brazilian coast.
Saudi Aramco increases its oil prices for Asia beyond initial expectations, reflecting strategic adjustments related to OPEC+ production and regional geopolitical uncertainties, with potential implications for Asian markets.
A bulk carrier operated by a Greek company sailing under a Liberian flag suffered a coordinated attack involving small arms and explosive drones, prompting an Israeli military response against Yemen's Houthis.
The Canadian government is now awaiting a concrete private-sector proposal to develop a new oil pipeline connecting Alberta to the Pacific coast, following recent legislation intended to expedite energy projects.
Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.
Swiss commodities trader Glencore has initiated discussions with the British government regarding its supply contract with the Lindsey refinery, placed under insolvency this week, threatening hundreds of jobs and the UK's energy security.
Facing an under-equipped downstream sector, Mauritania partners with Sonatrach to create a joint venture aiming to structure petroleum products distribution and reduce import dependency, without yet disclosing specific investments.
Dalinar Energy, a subsidiary of Gold Reserve, receives official recommendation from a US court to acquire PDV Holdings, the parent company of refiner Citgo Petroleum, with a $7.38bn bid, despite a higher competing offer from Vitol.
Oil companies may reduce their exploration and production budgets in 2025, driven by geopolitical tensions and financial caution, according to a new report by U.S. banking group JP Morgan.
Commercial oil inventories in the United States rose unexpectedly last week, mainly driven by a sharp decline in exports and a significant increase in imports, according to the US Energy Information Administration.
TotalEnergies acquires a 25% stake in Block 53 offshore Suriname, joining APA and Petronas after an agreement with Moeve, thereby consolidating its expansion strategy in the region.
British company Prax Group has filed for insolvency, putting hundreds of jobs at its Lindsey oil site at risk, according to Sky News.