In July 2025, China's energy trade experienced a notable divergence, with refined oil product exports reaching a 13-month high while liquefied natural gas (LNG) imports saw a year-on-year decrease. This trend highlights shifts in market dynamics, China's domestic production capabilities, and the ongoing impact of international trade policies.
China's exports of refined oil products, including diesel, gasoline, aviation fuel, and marine fuel, increased by 7.1% compared to July 2024, totaling 5.34 million tons. This marks the highest monthly export volume since June 2024. Diesel exports, in particular, surged by 53.2% year-on-year to 820,000 tons, the highest since September 2024, though year-to-date diesel exports remain down by 37.7%. Gasoline exports rose by 18.6% to 930,000 tons for the month, with year-to-date figures showing a 15.6% decrease. Aviation fuel exports climbed 10.9% to 1.97 million tons, reaching their highest point since March 2025, with year-to-date exports up by 4.3%.
Conversely, China's LNG imports contracted by 6.7% year-on-year in July, amounting to 5.44 million tons. While this volume is the highest recorded since January 2025, the overall year-on-year decline is significant. Analysts attribute this reduction to several factors, including weaker industrial demand, increased domestic natural gas production, and greater availability of piped natural gas. International trade tensions and tariffs, particularly with the United States, are also influencing China's energy sourcing strategies, potentially strengthening ties with alternative suppliers.
The slowdown in China's industrial production, which grew by 5.7% year-on-year in July, falling short of expectations, aligns with a manufacturing Purchasing Managers' Index (PMI) that has been in contraction territory for four consecutive months. This indicates faltering domestic and export demand, exacerbated by earlier tariffs and a cooling global demand environment.
These shifts in China's energy trade have broader implications for global markets. Increased refined oil exports are supporting regional fuel needs and could influence global pricing, especially for diesel. The decline in LNG imports suggests a slowdown in Chinese manufacturing, potentially exerting downward pressure on global natural gas prices. The interplay between domestic economic conditions, energy security, and international trade relations continues to shape global energy flows and the broader energy transition.