Beijing moves to safeguard domestic energy supply as conflict-driven volatility pushes crude prices above $100 per barrel…..
China has reportedly tightened restrictions on the export of refined petroleum products as authorities move to shield the country’s economy from the growing turbulence in global energy markets triggered by the ongoing Middle East conflict.
According to a report by Bloomberg News, the new measures affect shipments of refined fuels such as gasoline, diesel, and jet fuel, which Chinese refiners traditionally export in significant volumes.
China, the world’s second-largest economy, is also the largest importer of crude oil globally. While much of its refining capacity serves its vast domestic market, the country still exports substantial quantities of processed petroleum products. Official customs data show that China exported around 58 million tonnes of refined oil products last year.
However, sources familiar with the matter told Bloomberg that several Chinese oil refiners have begun cancelling previously agreed export cargoes, signaling a shift in Beijing’s approach to managing its energy supply amid geopolitical tensions.
The report suggests the latest directive represents a tougher stance than earlier guidance issued last week, when authorities had merely advised refiners to suspend shipments, a move that many companies initially interpreted as optional.
When asked about the development during a routine press briefing on Thursday, Chinese Foreign Ministry spokesman Guo Jiakun said he was not familiar with the report.
Oil Markets on Edge
Global energy markets have been on high alert since the escalation of the conflict involving the United States, Israel, and Iran. The geopolitical crisis has pushed crude prices sharply higher, with oil climbing above $100 per barrel on Thursday.
The price surge comes even as the International Energy Agency announced a record coordinated release of strategic crude reserves in an attempt to calm markets.
Despite the move, concerns remain over the stability of energy supplies from the Middle East. The strategic Strait of Hormuz a vital shipping route through which roughly one-fifth of global crude oil flows has effectively been shut down due to the escalating hostilities.
China is not a full member of the International Energy Agency and is therefore not required to participate in coordinated emergency oil releases.
China’s Strategic Oil Buffer
China’s dependence on Middle Eastern oil remains significant. Data from energy analytics firm Kpler show that more than half of China’s seaborne crude imports last year originated from the Middle East.
However, analysts believe Beijing is better positioned than many countries to weather short-term supply disruptions thanks to years of aggressive strategic stockpiling.
According to Kpler, China currently holds around 1.2 billion barrels of crude oil in onshore storage, equivalent to roughly 115 days of its seaborne crude imports.
Beijing has tapped into its strategic petroleum reserves before. In 2021, the government authorized a release of crude stocks to help ease rising factory-gate inflation and stabilize domestic energy costs.
That decision was announced by the National Food and Strategic Reserves Administration, the body responsible for managing China’s massive state reserves.
So far, however, the agency has not announced a similar intervention in response to the current turmoil in global oil markets.
Still, Chinese officials have made it clear that safeguarding the country’s energy supply remains a priority.
“China will do what is necessary to protect its energy security,” Guo said earlier this week.
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