China’s state-owned Sinopec saw crude imports fall by 3.2% in July on year, the first decline seen in 16 months. The company warned growth rate in Chinese crude imports could fall in the second half of this year.
Sinopec has benefited from the government’s mandated fuel price hikes. However, this increase is below the rise in prices for crude imports. As a result the company was unable to pass the full cost increase to customers. Although there was a 75.4% climb in prices the company only saw a 6.7% increase in profits.
Refiners have chosen to run down high inventories that have been built up by record levels of purchases in the first half of the year, which saw crude shipments to China jump up by 30%.
High sales reveals growing oil demand from the world’s leading energy consumer. The International Energy Agency reported last month that China has surpassed the U.S. as the largest oil consumer. Only a decade earlier, China used about half the energy consumed in the U.S.
