Chinese economic slowdown impacts global oil demand

What happened: Chinese oil imports in May plummeted to an eight-year low, with refinery runs also dropping to all-time lows. This was driven by a price spike due to Persian Gulf tanker disruptions and a collapse in refining margins for Chinese refiners. Goldman Sachs subsequently cut its 2027 oil price estimate, citing weaker demand expectations.

Market impact: This slowdown in Chinese oil demand impacts global oil prices and energy companies. Brent crude is now expected to average $80 per barrel in 2027, $10 less than previously forecast. The oil and gas sector, particularly companies heavily exposed to Chinese demand, may face valuation repricing.

What to watch next: Upcoming catalysts include China's June oil import data (release date unknown), the International Energy Agency's (IEA) monthly oil market report on July 14, and Chinese GDP data for Q2, scheduled for July 15. These will provide further insights into the trajectory of Chinese oil demand and global oil market dynamics.