China's August crude throughput climbs 11.2% as fuel exports rebound

China's crude oil processing rose for a second consecutive month in August, official data showed, as stronger fuel exports following Beijing's mid-July easing of export restrictions supported refinery operations.

The National Bureau of Statistics said the country processed 59.07 million metric tons of crude last month, equivalent to 13.91 million barrels per day (bpd). That marked an 11.2% increase from July, but a 6.9% decline compared with August a year earlier.

Refinery runs had fallen to COVID-era lows in June, squeezed by higher oil prices during the Iran war and by fuel-export curbs designed to protect domestic supply. Analysts said exports are now the main driver of processing activity and are likely to remain so in the coming months, since elevated crude prices tend to dampen domestic demand.

Domestic crude production edged up 0.8% year-on-year in August to 18.43 million metric tons, or 4.34 million bpd. Natural gas output rose 0.8% to 21.4 billion cubic metres.

For the first eight months of the year, throughput stood at 456.12 million metric tons, or 13.7 million bpd, down 6.6% from the same period a year earlier. Crude output over January-August reached 146.39 million metric tons, up 0.9%, while gas production totalled 175.7 bcm, up 1.1%.

Beijing does not disclose reserve levels, but calculations that add official crude imports to domestic output and subtract refinery throughput indicate a stock drawdown of 639,000 bpd in August — the second-largest since the Iran war began, after a 936,000 bpd draw in June.

Analysts said inventories are adequate to shield domestic supply from import disruptions. Seaborne crude arrivals are expected to keep recovering through September and October, reaching roughly 8 million bpd absent further interruptions, according to Vortexa. The outlook for November and December is less certain, though refiners are seen holding sufficient onshore stocks to absorb any shipping disruption.

One analyst noted that drawing on inventories to secure domestic supply is manageable, but using them to sustain higher exports is not. State-owned refiners are therefore still seeking crude to support exports, with export margins remaining strong. Should state-run plants lift stock draws to 1 million bpd, inventories built up since 2025 would likely last until around the end of the year.

Risks to the export recovery persist. An analyst at Rystad Energy said that following attacks on the Saudi East-West pipeline and with the possibility of further escalation in the Strait, fuel-export restrictions could be reinstated at any time after October. The analyst framed the choice as one between prioritising energy security, which would argue for halting exports, and supporting refining margins and the wider economy, which would favour continued shipments.