China's oil stockpiles have reached their highest level in almost three years.

In March, crude oil inventories in China reached their highest level in nearly three years, indicating that demand growth was not keeping pace with refinery processing rates, which were at a yearly high due to cheaper Iranian and Russian crude. According to Reuters' Clyde Russell, China stored 1.74 million barrels per day last month, the highest storage inflow rate since June 2023.

Chinese refinery run rates averaged 14.85 million barrels daily, representing a slight annual increase of 0.4%. Imports increased by a significant 5% in March to 12.11 million barrels daily, suggesting that China's oil demand may be more robust than many forecasts, including those from its energy sector, reflect. China's domestic oil production also reached a record high of 4.6 million barrels daily in March, casting doubt on these assumptions.

Additionally, Russell pointed out that in the first two months of this year, Chinese refiners had to tap into inventories to meet fuel and oil product demand due to insufficient domestic production and imports. Iranian imports have also been significant, with Chinese buyers favoring bargain-priced Iranian crude, which accounts for nearly all of Iran's oil exports. In March, imports of Iranian oil into China rose to 1.71 million barrels daily, up from 1.43 million barrels daily in February, marking the highest rate since last November.