China's June crude imports fall to lowest since 2016

China's crude oil imports plummeted to their lowest monthly level in nearly a decade in June, as high prices and a structural shift toward electric vehicles combined to dramatically reduce the nation's appetite for fuel. Customs data released on July 14 showed imports fell 41.3% from a year earlier to 29.27 million tonnes, the weakest figure since October 2016.

The decline extends a trend exacerbated by the ongoing conflict around the Strait of Hormuz, which began in late February and disrupted a key transit route for global oil supplies. China, the world's top crude importer, typically relies on the Middle East for about half of its purchases. The crisis initially spiked prices and reduced refiners' willingness to pay for costly crude.

Concurrently, refinery processing volumes were slashed to a six-year low in June, dropping 18% year-on-year to 51.24 million tonnes. Independent refiners, many of which rely on Iranian crude, have been particularly hard hit by collapsing profit margins. Industry analysts expect further declines in processing throughout July as more facilities undergo maintenance to limit financial losses.

While the supply shock from the war initially threatened...