FINWIRES · TerminalLIVE
FINWIRES

China's Q2 Crude Oil Imports Fall 32% as Higher Prices Weigh on Demand, EIA Says

By

China's crude oil imports fell 32% in Q2 2026 as higher prices after the Strait of Hormuz disruption curbed demand, the US Energy Information Administration said Friday.

China imported 8.1 million barrels per day of crude oil in Q2, a decline from the previous quarter. Imports also slipped below 8 million b/d in both May and June for the first time since 2016, the EIA said.

The decline followed a period of aggressive buying. China imported a record 11.6 million b/d in 2025 and averaged 12 million b/d in the second half of 2025, maintaining that pace through February 2026 as lower prices supported strategic stockpiling, the EIA added.

Seaborne cargoes accounted for most of the decline, while pipeline imports remained broadly stable.

Waterborne crude imports fell sharply from Q1 to Q2, declining by 910,000 b/d from Iraq, 640,000 b/d from Russia, and 600,000 b/d from the UAE, while pipeline imports remained broadly stable, the EIA said.

A steeper drop in crude imports than refinery runs suggests China tapped inventories during Q2 2026. Imports declined by 3.9 million b/d from Q1 2026, while refinery throughput fell by 2.2 million b/d.

China's weaker crude buying reduced global oil demand and helped ease upward pressure on prices that followed supply disruptions through the Strait of Hormuz, according to the EIA.

The EIA estimates global oil inventories declined by a record 5.1 million b/d in 2Q26. The agency said inventory draws would have been even larger if weaker demand, led by China's lower imports, had not offset part of the supply disruption.

Related Articles

Oil & Energy

US Oil Update: Futures Dip as US-Iran Talks Continue, Saudi Proposes Naval Coalition

Crude futures retreated in after-hours trading on Thursday as markets weighed continued peace talks between the US and Iran against a proposed naval coalition designed to safeguard vital Middle Eastern shipping corridors.Front-month West Texas Intermediate crude futures fell by 0.6% to $83.96 per barrel, while Brent futures were down 1.4% to $89.42/bbl.The Saudi Defense Ministry said on Thursday that over 40 countries attended a meeting to discuss "strengthening maritime defense cooperation and unifying efforts to protect the security of maritime passages.The push to create a naval alliance comes as Iran-backed Houthi militants in Yemen declared a maritime embargo of Saudi Arabia last week. Iran has repeatedly attacked ships transiting the Strait.On Thursday, Pakistani Foreign Ministry spokesperson Tahir Andrabi said that peace negotiations between the US and Iran are "ongoing" to restore stability, particularly in the Strait of Hormuz, according to media reports.Negotiations between parties are currently ongoing, particularly on the Strait of Hormuz and to de-escalate, Pakistani foreign ministry spokesman Tahir Andrabi told media outlets.Pressuring prices, signs of increased flows through the Hormuz have partly offset concerns over a fresh wave of hostilities from Iran to the Black Sea.Kpler said that the crude backlog has shifted between the Gulf and the Gulf of Oman rather than disappeared. Persistent maritime security risks, war risk insurance costs and Iranian interdiction now appear to be the main barriers.Meanwhile, the Middle East conflict escalated on Wednesday after the US retaliated against Iranian strikes on American forces with a fresh wave of attacks.Iran's Islamic Revolutionary Guard Corps threatened further escalation on Thursday after a wave of retaliatory US attacks. The IRGC said that it "will punish the aggressor," adding that countries aiding the US in the conflict would also "receive a harsh response," according to local media.On Wednesday, the US launched a wave of strikes against Iranian military targets in retaliation for missile attacks on American forces in the region.US Central Command described the operation as a "powerful response" to Tuesday's attempted Iranian attacks on US forces in the Middle East.Saxo Bank strategists said that US-Iran fighting threatened global energy supplies after an attack on US forces in Jordan prompted a strong response vow from President Trump.

Oil & Energy

Hormuz Crude Ship Flows Remain Reduced Despite Pause in US Strikes

Commercial vessel traffic through the Strait of Hormuz remains constrained despite a pause in US strikes against Iran, with tanker traffic and Gulf crude exports showing little sign of recovery as heightened security risks continued to deter shipowners, maritime data showed on Thursday."A four day pause in US strikes on Iran has done little to restore Middle East Gulf crude exports," Kpler posted on X on Thursday.The latest data from Kpler indicates that confirmed tanker clearances through the Hormuz remained close to "recent lows," while Gulf crude loading activity fell by over half for the first time in six weeks, underscoring persistent disruptions to one of the world's most important oil export routes.The backlog of crude tankers has shifted between the Arabian Gulf and the Gulf of Oman, rather than clearing, reflecting continued operational bottlenecks rather than an improvement in export flows."Persistent maritime security risks, war risk insurance costs and Iranian interdiction now appear to be the main barriers," Kpler strategists said, noting that offshore ship-to-ship transfers have helped manage inventories without materially increasing export capacity.The analysts said that the latest data suggest physical crude flows continue to provide a more reliable gauge of regional supply conditions than geopolitical developments alone.Traffic through the Hormuz remained well below normal levels in the last 48 hours, according to the UK Maritime Trade Operations in a Thursday note.The latest shipping tracking data showed only single-digit tanker movements in both directions during recent reporting periods, with most transits concentrated along the northern corridor controlled by Iran, the UKMTO said, noting that US-facilitated commercial transits increased marginally but remained limited."Traffic patterns continued to reflect a cautious operator posture following earlier attacks, and several companies delayed or rescheduled passages," the UKMTO said. A growing number of vessels transited with their Automatic Identification System signals switched off, reducing visibility of overall traffic.UKMTO said Iran's Islamic Revolutionary Guard Corps continued to disrupt commercial vessels through radio calls, unmanned aerial vehicle overflights and targeted surveillance of merchant vessels.Though no new attacks on shipping in the Hormuz were confirmed over the past 48 hours, UKMTO said that drifting or uncharted naval mines remained a persistent hazard near established traffic separation schemes.Elsewhere, commercial traffic through the southern Red Sea and the Bab el-Mandeb Strait continued steadily. However, security risks increased following a confirmed Houthi attack on a Saudi-flagged tanker that was struck by an unidentified projectile before catching fire.Meanwhile, the US Central Command said in an X post on Thursday that as of July 30 its forces had redirected 24 commercial vessels, disabled two others and boarded two ships to ensure compliance with security measures.Centcom also said its forces had struck dozens of IRGC targets across Iran, including military command centers, missile and drone facilities, coastal surveillance sites and maritime capabilities to reduce threats to commercial shipping.

Oil & Energy

Blast Disrupts LNG Operations at Egypt's Damietta Import Hub, Kpler Says

An explosion damaged two LNG vessels at Egypt's Damietta terminal, disrupting operations at a key import hub, Kpler said in a Thursday note.Kpler said both vessels sustained damage, although authorities and operators have not disclosed the extent of the impact on the terminal, repair timelines, or when normal operations will resume.Kpler data showed both vessels left the terminal hours after the explosion and are now idling offshore in the Mediterranean Sea. Authorities have not disclosed the cause of the blast or reported any injuries.One of the damaged vessels had been scheduled to begin operating as a floating storage unit on Aug. 1 under a short-term agreement with state-owned Egyptian Natural Gas Holding to support Egypt's LNG import capacity ahead of peak summer demand, Kpler said.US-based Energos Infrastructure operates the second vessel as a floating storage and regasification unit at Damietta, supplying regasified LNG to Egypt's domestic gas network. Damage could limit the terminal's LNG import capacity, Kpler said.Kpler data also showed another LNG carrier loaded with 162,500 cubic meters of LNG sailed away from Damietta instead of unloading its cargo after the incident.