(The views expressed here are those of the author, a columnist for Reuters)

LAUNCESTON, Australia - China's crude imports are on track to rebound in November to the highest in three months, but the increasing appetite of the world's largest oil importer is more about price than rising demand.

Crude oil arrivals may reach around 11.4 million barrels per day (bpd) this month, the most since August and the third-highest month so far in 2024, according to vessel-tracking and port data compiled by commodity analysts Kpler and LSEG Oil Research.

If the final outcome for November is in line with the forecasts, it will be the highest monthly imports since August's official figure of 11.56 million bpd, and the third-strongest month so far this year.

However, assuming the increase in crude imports is because of a recovery in demand may be optimistic, given China's refinery throughput remains weak and economic indicators continue to show the world's second-biggest economy is struggling for growth momentum.

More likely the increase in November imports is down to price, with refiners taking advantage of the weakening prices at a time when cargoes arriving this month would have been arranged.

Global benchmark Brent crude futures dropped to their lowest level for 33 months in early September, trading as low as $68.68 a barrel on Sept. 10.

The price had been trending lower since early July, when it reached as high as $87.95 a barrel amid rising tensions in the Middle East and the decision by the OPEC+ group of exporters to defer a planned increase in production.

The lag between when cargoes are bought and physically delivered to China ranges from about six weeks to three months, depending on where the oil is sourced from.

This means that crude arriving in November was secured at a time when oil prices were hitting the lowest levels in almost three years.

China's refiners have in the past shown that they will buy more crude than they need when they deem prices to be low, and cut back on imports when they view prices as having risen too high, or gained too rapidly.

This dynamic has been apparent in China's imports of crude oil so far in 2024, with arrivals declining by 420,000 bpd in the first 10 months of the year, with much of the weakness coming after crude prices rallied strongly in the second quarter.

Since the September low crude prices have recovered somewhat, reaching above $80 a barrel in early October before settling into a range largely between $70 and $75, ending at $73.10 on Wednesday.

The steady prices may suggest that Chinese refiners will be happy to buy crude volumes sufficient to meet their needs, rather than purchase surplus oil to store for later processing.

However, the election of Donald Trump to a second term as U.S. president may alter the calculations of Chinese buyers, especially those who purchase Iranian crude.

 

IRAN CONCERNS

Trump and members of his incoming administration have made it clear that they intend to return to his hardline policy of enforcing sanctions against Iran because of Tehran's nuclear programme and its support of militants groups fighting Israel.

Traders report that this is already leading to some Chinese refiners, particularly independent processors, pulling back from buying Iranian crude.

While overall crude supply is sufficient to comfortably handle any loss of Iranian barrels from the market, it is likely to impact regional pricing.

If Chinese refiners turn to other Middle Eastern grades, it's likely that prices in the region will rise relative to other crudes.

Already there is some evidence to suggest this is happening, with the Brent-Dubai exchange for swaps , which tracks the premium of Brent crude over regional Middle East marker Dubai, declining in recent weeks.

The premium for Brent over Dubai was $1.44 a barrel on Wednesday, down from the 2024 high of $2.98 on Aug. 30.

The views expressed here are those of the author, a columnist for Reuters.

(Editing by Michael Perry)