China's Oil Imports Surge Amid Storage Build-Up

China's November oil imports experienced a notable 5% year-on-year increase, a trend that appears to contradict expectations of slowing global oil demand. This surge is underpinned by a significant expansion of the country's oil storage infrastructure. New storage sites are being built across China, collectively adding substantial capacity, suggesting a strategic effort to accommodate higher import volumes.

This proactive stockpiling is creating uncertainty for oil demand forecasters. While some expected China's demand growth to moderate, the ongoing infrastructure development indicates a continued appetite for crude. Notably, recent car sales figures from China reveal a year-on-year decline in both overall vehicle sales and electric vehicle (EV) sales, raising questions about the uninterrupted pace of EV adoption and its impact on oil consumption.

Despite potential shifts in domestic demand drivers like EV adoption, China's oil reserves are substantial, exceeding 1.5 billion barrels, with further expansion of storage capacity planned. Analysts suggest that actual imports could surpass current forecasts, particularly in the latter half of next year, as China continues its aggressive crude oil stockpiling strategy.