The possible reopening of the Strait of
Hormuz may not prompt China to return quickly to prewar levels of oil purchases
from the Persian Gulf.
1. China is not expected to quickly boost oil
imports even if the Strait of Hormuz fully
reopens, despite the resumption of tanker traffic from the Persian Gulf.
2. Large crude oil stockpiles held
by Chinese state-owned energy companies remain nearly full, reducing the need
for immediate additional imports.
3. China appears not to have significantly drawn down its
strategic petroleum reserves during the conflict.
4. During the war, China reduced daily oil imports by about
one-third, mainly due to higher oil prices.
5. The country was able to cut imports
because it had built
substantial inventories over several years when prices were
low.
6. China has increasingly used commodity
stockpiles, including oil, as a way to store
foreign exchange earnings and enhance economic security.
7. Analysts expect Chinese oil companies to
remain price-sensitive
and increase purchases only gradually.
8. Domestic demand for refined fuels has
weakened, as higher prices prompted households and
businesses to reduce fuel consumption.
9. Sales of gasoline-powered vehicles declined sharply
during April and May, contributing to lower fuel demand.
10. China restricted exports of refined petroleum products
to ensure adequate domestic supplies during the crisis.
11. The export curbs contributed to fuel shortages in several Asian
countries, especially those with limited refining capacity.
12. China’s storage tanks are now filled with gasoline, diesel, jet fuel,
and other refined products, limiting incentives for refiners to
process more crude oil.
13. Experts do not expect China's crude oil
imports to return to
pre-war levels in the near future.
14. Beijing remains cautious due to uncertainty surrounding the durability
of the U.S.-Iran agreement and potential security risks in the
Strait of Hormuz.
15. China has welcomed the reopening of the
strait, recognizing its importance for global energy trade.
16. The agreement between Washington and
Tehran could eventually lead to the removal
of sanctions on Iranian oil exports.
17. If sanctions are lifted, Chinese refiners
may lose the $3–10 per
barrel discount they have enjoyed on Iranian crude.
18. Before the conflict, China purchased over 90% of Iran’s oil exports,
amounting to more than 1.5 million barrels per day.
19. Oil exports to China have become an
important source of revenue for both Iran
and Russia.
20. China maintains that many Western
sanctions on Iranian and Russian oil lack legitimacy because they were not
approved by the United
Nations.
China’s
extensive oil reserves, weak domestic fuel demand, and high inventories of
refined products have insulated it from immediate supply pressures.
Consequently, Beijing is likely to adopt a cautious and gradual approach to
increasing oil imports despite the easing of tensions around the Strait of
Hormuz.
[ABS News Service/22.06.2026]
While
the United States and Iran haggle over reopening the Strait of Hormuz and restoring
oil exports from the Persian Gulf, China, the world’s largest oil importer, is not
expected to quickly ramp up purchases from the region.
If
normal traffic through the strait fully resumes in the coming weeks, numerous tankers
carrying oil bound for China that have been stranded in the Persian Gulf during
the war would be on the move again. Their eventual arrival at Chinese ports is likely
to produce a temporary surge in deliveries.
China
finds itself in a very different position from much of the world, which is emerging
from the war in Iran with depleted oil supplies.
The
crude stockpiles held by the country’s state-owned energy companies remain nearly
full. Beijing appears not to have tapped its vast strategic reserves, and storage
tanks at Chinese refineries are brimming with gasoline, diesel and other refined
products.
China
cut its daily oil imports by roughly a third during the war. The pullback, driven
largely by higher prices, helped ease some of the upward pressure on global oil
markets caused by the almost complete closure of the Strait of Hormuz.
China
was able to reduce imports so sharply in part because it had been buying more oil
than it needed before the war. For years, it accumulated inventories whenever prices
were low as part of a broader push to strengthen national self-reliance and improve
its ability to withstand supply disruptions.
China
also imported additional oil to reduce its trade surplus. In recent years, Beijing
has increasingly parked excess foreign exchange earnings in stockpiles of commodities
such as oil rather than overseas bank deposits or Treasury bonds, after watching
Western governments freeze Russia’s foreign assets following its invasion of Ukraine
four years ago.
Few
analysts expect China to quickly return to its previous pace of imports, particularly
as world oil prices still have not fallen back to their levels before the Iran war.
“I
would expect China’s oil companies to continue to be price sensitive and to increase
their purchases gradually,” said Philip Andrews-Speed, a longtime China oil specialist
at the Oxford Institute for Energy Studies.
Chinese
companies kept their refineries running throughout the war by drawing on their extensive
corporate stockpiles of crude. But demand in China for gasoline, diesel, jet fuel
and other refined products appears to have weakened as prices rose and households
and businesses became cautious about fuel consumption. Sales of gasoline-powered
cars plunged in April and May.
At
the same time, the Chinese government halted most exports of refined products this
spring to ensure adequate domestic supplies. The move contributed to severe
shortages elsewhere in Asia, particularly in developing countries with limited refining
capacity. China overtook the United States in 2024 to become the world’s largest
oil refiner and is typically a major supplier of refined fuels to neighboring countries.
The
combination of weak domestic demand and the export halt has left storage tanks so
full of gasoline, diesel, jet fuel and other products that oil companies have little
incentive to buy and process additional crude, analysts said.
“I
don’t expect China’s crude imports to structurally recover to prewar levels anytime
soon,” said Muyu Xu, a senior oil analyst at the data service Kpler.
Imports
could increase if Beijing suddenly decided to allow unrestricted exports of refined
products that are now in short supply elsewhere. But China has long taken a cautious
approach to energy policy. Uncertainty also lingers over how quickly any mines that
Iran may have laid in the strait can be cleared and whether the U.S.-Iranian agreement
will hold. The accord’s main provisions last only 60 days.
“The
central risk of conflict in the region is not removed,” said David Broadstock, a
partner and oil analyst at the Lantau Group, an East Asian energy consulting firm.
China’s
Ministry of Foreign Affairs has welcomed the agreement and the possible reopening
of the Strait of Hormuz while offering little indication of how Beijing might adjust
its energy policies. “Early resumption of safe and free passage through the strait
serves the interests of all parties,” Lin Jian, a ministry spokesman, said at a
briefing on June 16.
The
closure of the Strait of Hormuz had disrupted much of China’s oil supply not only
from Iran but also from other Persian Gulf producers, including Saudi Arabia and
Kuwait.
Yet
the terms of the 60-day agreement between Washington and Tehran also remove much
of the incentive for China’s small independent refiners to keep buying large volumes
of Iranian oil.
The
agreement calls for the United States to work with other countries and the United
Nations to remove international sanctions on Iranian oil exports. If that happens,
China’s refiners could lose the discounts of $3 to $10 per barrel they have enjoyed
by purchasing Iranian crude despite international sanctions.
Those
discounts generated savings worth several hundred million dollars a month for Chinese
refiners. Before the closure of the strait, China was buying over 90 percent of
Iran’s oil exports, or more than 1.5 million barrels a day, according to estimates
by Kpler.
Oil
sales to China have accounted for 6 percent or more of the economies of Iran and
Russia in recent years. Western governments have long argued that those purchases
have helped Iran finance proxy forces in Lebanon, Iraq, Syria and Yemen and enabled
Russia to fund its war in Ukraine.
Beijing,
however, maintains that it is not bound by many Western restrictions on Iranian
and Russian oil because they were not approved by the United Nations. Russia and
China have repeatedly used their positions as permanent members on the U.N. Security
Council to block such measures, contending that trade and engagement are more effective
than sanctions in addressing issues like Iran’s nuclear program.