China Oil Imports Fall as Global Market Absorbs Supply Shortfall

China's crude oil imports fell 20 percent in April to 9.4 million barrels per day, the largest monthly decline since the pandemic, Fortune reported. Data for May indicate a further drop to 7 million barrels per day. Beijing maintains a cap on fuel exports, which has reduced refinery throughput.

At the same time, China has released portions of its estimated 1.4 billion barrels in strategic reserves.

A U.S. naval blockade on Iran and the closure of the Strait of Hormuz have removed more than 10 million barrels per day from global markets. Saudi Arabia rerouted some exports, Asian economies imposed rationing, and major consuming nations released strategic reserves, but these measures have not fully offset the shortfall.

Vice President Neil Chapman said at an industry conference on Thursday that inventories are approaching "unheard of" lows. Chevron CEO Mike Wirth stated Thursday that oil prices are likely to rise in June and July as market buffers are exhausted. Hamad Hussain, climate and commodities economist at Capital Economics, wrote in a note on Friday that weaker Chinese demand could push the global market's "tipping point" from June into July.