Low oil prices mean big savings for China

China has saved a tremendous amount of money from the plummeting oil prices, spending $25.1 billion less than they should from January to May 2020.

China is the world's largest oil consumer and one of the world's largest oil producer. The rise and fall of oil price has an important impact on China's ability to buy and sell oil. When oil price falls, majors such as PetroChina and Sinopec loses money from sale of refined oil but will save money from cheaper imports.

According to data imported from Customs, China imported 48 million tons of crude (about 350 million barrels) in May, and 216 million tons of crude (about 1.58 billion barrels) from January to May 2020, an increase of 5.2% from previous year.

The average import price was around $52 per barrel, down 21.2% from previous year.

According to the same data, China saved about $13 per barrel of crude imports, and about $21.3 billion in total just from crude imports from January to May 2020.

In addition to crude oil, the same data also tracked refined oil activity. Import of refined oil fell to 13.4 million tons during January to May 2020, down 9.3% from previous year. The average import price during the same period was $433 per ton, down about 18.3% from previous year.

Therefore China saved about $97 per ton on average and $1.3 billion in total from importing refined products from January to May 2020.

For natural gas, China imported 7.8 million tons of natural gas in May and 40.1 million tons of natural gas from January to May 2020, an increase of about 1.9% from previous year. The average import price was $377 per ton, down 14.7% from previous year. It is calculated that about $62 per ton of natural gas was saved by importing them during January to May 2020, making it a total of $2.5 billion saved by importing natural gas during January to May 2020 alone.