JPMorgan: China's Crude Oil Imports to Rebound from August, Top Pick Is PetroChina
N.R. Finch
JPMorgan expects China's crude imports to recover gradually from August — volumes had slumped to an almost eight-year low, but the bank says more than half the decline is temporary and names PetroChina as its top energy pick.
How far did imports actually fall?
From February to May, China's crude imports plunged by 4.8 million bpd — steeper than the 4 million bpd drop during the worst of Covid in 2020.
May imports slid to 7.8 million bpd, the lowest since December 2017; vessel-tracking data shows June held near 8 million bpd.
This means → inventories were still draining at roughly 3 million bpd in June, building pressure to restock.
Why does JPMorgan think August is the turning point?
The bank estimates about 3 million bpd of the decline is temporary — driven mainly by Middle East conflict disrupting supply chains.
In plain terms = nearly sixty percent of the drop is not "demand gone," but "temporarily unable or unwilling to buy."
As petrochemical demand rebounds and China begins replenishing strategic reserves, imports should recover from August onward.
What about the longer-term outlook?
JPMorgan also cut its long-term forecasts for gasoline and diesel consumption: annual declines of 6% and 4% respectively through 2030, steeper than prior estimates.
This reflects an EV-substitution pace eating into fossil fuels faster than the bank's earlier models assumed.
Short-term restocking and long-term demand erosion coexist — imports will bounce, but the ceiling is coming down.
Which stocks does JPMorgan recommend?
Top energy pick: PetroChina — expected H1 dividend of RMB 0.27 per share (≈ US$0.04), implying an annualized yield of roughly 6.4% on the HK listing, well above the 4.8% expected from rival Sinopec.
Top chemicals pick: Nan Ya Plastics (Taiwan) — upside potential if the company wins customer qualification for high-end copper-clad laminates (a core circuit-board material) used in AI servers later this year or early 2027.
Catch-up play: LG Chem (South Korea) — set to benefit from lower oil prices and improving global energy-storage demand, yet up only about 4% year-to-date versus peer Albemarle's near 18% gain.
How could the fuel-export ban reshape the second half?
In March, Beijing banned refined-product exports via general trade, citing Persian Gulf conflict risks to supply security and prioritizing domestic availability.
JPMorgan says whether the ban is fully lifted hinges on assessments of domestic supply adequacy and Strait of Hormuz transit conditions.
If lifted, export volumes could jump 88% to 160% above H1 levels — but only if export margins stay positive; should eased U.S. sanctions cut independent refiners off from discounted Iranian crude, their profitability squeeze would deepen instead.
Content is for reference only, not financial advice.