The Changqing shale oil field in Northwestern China has produced a cumulative 20 million tons of crude, Chinese media reported, noting the amount marks the start of a new phase in domestic oil production.
The Rizhao Shihua Crude Oil Terminal, which was blacklisted by Washington last week over its role in taking Iranian crude, is located in Shandong province, the center of China’s refining industry. Partly owned by Sinopec, Rizhao is the major entry point for foreign crude for the oil major, also known as China Petroleum & Chemical Corp., and is connected with several of its facilities by a lengthy pipeline.
The rise in crude imports was accompanied by an increase in refinery processing rates to 81.05%, which was the highest since the start of the year for state refiners. Independents, commonly called teapots by the media, also raised their utilization rate, to some 62%.
A Very Large Crude Carrier heading for the Chinese port of Rizhao has been diverted to another port, after the U.S. Treasury imposed sanctions on the Rizhao oil terminal as part of a new pressure campaign on China for its purchases of Iranian crude.
The biggest European powers which are party to the so-called Iranian nuclear agreement of 2015, or the Joint Comprehensive Plan of Action (JCPOA) as it is officially known, launched in late August a 30-day process that would reinstate UN sanctions on Iran on September 27, if no deal is reached in the meantime.
Independent refiners are meanwhile due for a consolidation amid the overcapacity issues. China has the highest oil refining capacity in the world, at over 18.2 million barrels daily as of 2024. By next year, this will have grown to over 21 million barrels daily. This massive capacity, however, is unlikely to survive the next ten years without some trimming, Wood Mackenzie warned earlier this year. The consultancy said it expected 10% of China’s refineries to shut down before the end of 2034.
Despite very strong refinery runs in August, China had 1 million barrels per day (bpd) of more crude available than processed at refineries, suggesting that the world’s top crude importer continues to buy more oil than it needs, with most of the surplus likely going to storage.
President Trump reportedly called on the European Union to impose 100% tariffs on China and India if it wanted the United States to step up its own sanction pressure on Russia, as Brussels discusses its 19th package of sanctions against Moscow.
“So far, there has been no discussion of tariffs, either on India or on China,” one of the unnamed sources told Reuters, adding that Brussels was just wrapping up a trade deal with India and did not want to jeopardize that.
Renewables, oil and gas, mining, and manufacturing took the lion’s share of Chinese investments in Brazil in 2024, a new report by the Brazil-China Business Council, CEBC, showed this week.