China’s oil import data for November has shown a 5% increase year on year, indicating a bullish trend in the market. This rise in imports comes at a time when China is also expanding its storage capacity to accommodate more crude oil, defying predictions of a weakening oil demand growth. This move by China has added uncertainty to oil demand forecasting, making it challenging for analysts to accurately predict future trends.
FGE NexantECA recently revised China’s apparent oil demand for October downwards to 14.6 million barrels daily, 570,000 barrels less than initially expected. Despite this revision, forecasters anticipate that China, as the world’s leading oil importer, will ramp up its oil purchases next year as it continues to build a substantial reserve of crude oil. This strategic move by China is expected to drive a rebound in Asian oil demand, with forecasts projecting an increase of 36,000 barrels daily in 2026.
However, the outlook for oil demand growth in China is not without its challenges. Reports suggest that the adoption of electric vehicles (EVs) in the country could slow down the growth of oil demand. Recent data on car sales in China revealed a 32% annual decline in total car sales and a 17% drop in EV sales specifically. This indicates that the transition to EVs may not be as rapid as initially anticipated, impacting oil demand projections.
Despite these uncertainties, China’s oil stockpiling efforts remain a significant factor in stabilizing global oil prices. With over 1.5 billion barrels of oil currently in storage and plans to expand storage capacity by 260 million barrels in 2026, China is poised to maintain a steady demand for oil. Analysts suggest that actual imports could surpass forecasts, leading to higher stockpiling rates in the coming year.
The International Energy Agency’s recent report revised demand projections higher and reduced glut forecasts, signaling a stronger demand for oil globally. Total global oil supply decreased in November compared to previous months, indicating a potential shift in market dynamics. China’s role in the oil market, coupled with its stockpiling efforts, could present surprises in 2026, influencing the overall supply-demand balance.
In conclusion, China’s strategic oil import and storage decisions continue to shape the global oil market landscape. As the country expands its storage capacity and increases stockpiling rates, the stability of oil prices is likely to persist in 2026. With evolving market dynamics and shifting demand trends, China remains a key player in the future of the oil industry.
By Irina Slav for Oilprice.com
