China's oil imports hit 5-month high after Beijing lets refiners resell more to help the economy

• Chinese oil imports hit a five-month high in October, according to customs data.
• Imports rose after Beijing issued fuel-export quotas in a bid to boost its battered economy.

China's oil imports hit a five-month high in October after Beijing allowed refiners to resell more crude abroad in a bid to boost the country's struggling economy.

China bought 10.2 million barrels of oil a day last month, according to customs data cited by Bloomberg – meaning imports rose 4% from September and to their highest level since May.

The country is bringing in more oil from abroad after its government issued quotas that allow Chinese refiners and traders to export another 15 million tons of fuel from late September to the first quarter of 2023.

Beijing is hoping that higher fuel exports help to revive the economy, which has slumped this year due to its hardline zero-Covid lockdown approach and a debt crisis in China's property sector.

The quotas have likely lifted imports as refiners bring in oil that they can then resell to international buyers, analysts said.

"China's crude import growth is mostly triggered by export quota, with domestic demand still sluggish," Emma Li, an analyst at the commodities research firm Vortexa, told Bloomberg.

The quotas also lifted China's coal imports 8% year-on-year – although natural gas imports fell nearly 19%, according to data from Refinitiv Eikon.

China still isn't bringing in as much oil as it did last year despite a strong October for crude imports.

Imports have fallen 2.7% year-on-year in 2022, averaging 9.97 million barrels a day according to customs data, as Beijing's hardline virus lockdowns weigh on the economy.

"Demand this year has been largely under pressure due to China's zero-Covid policy," ING analysts Warren Patterson and Ewa Manthey said.

The quotas have also thus far failed to lift exports, which fell 0.3% in October in US-dollar terms, according to Refinitiv Eikon.

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