On Thursday, citing customs data, Reuters reported that crude oil imports in China surged to their highest levels in nearly three years in March, as a growing fuel export demand has caused Chinese refineries to ramp up their production.

In March, oil imports surged 22.5% to 52.3 million tons, equivalent to 12.3 million barrels per day (bpd). According to the figures, it was the largest volumes of crude shipments seen in any month going back to June 2020.

Analysts say the large amount of  crude imports is attributable to the massive increase in Chinese exports of refined fuels, which surged in March 35.1% to 5.5 million tons, up from 4.1 million tons one year prior.

Xu Peng, a refined products analyst at China-based commodities consultancy JLC said, “Refined fuel exports will increase, as currently the margins on exported gasoline are quite positive.”

Also encouraging the rise in imports is the combination of the economic recovery in China which has caused a surge in domestic demand, mixed with a free flow of heavily discounted Russian crude due to Western sanctions limiting its pool of buyers.

Total oil imports for the first quarter hit 136.6 million tons, marking a 6.7% rise over the 127.9 million tons seen one year prior.

Consultancy group Wood Mackenzie projected in its March report that Chinese oil demand would see a 1.1 million bpd increase this year in its best case scenario, which would fuel what is expected to be a 2.6 million bpd increase in global consumption.

The report noted, “Depending on its consumers’ appetite to spend and the ambition of government policy, China’s reopening could once again turn up the heat on prices across the energy and natural resources spectrum.”

The report predicted that if there is a high-growth scenario, China’s oil demand could increase by 1.4 million bpd year over year.