China oil imports plunge during Iran war, recovery uncertain
This digest was compiled by AI from multiple sources — links to the originals are below.
China's crude oil imports have dropped sharply since the outbreak of the Iran war, with volumes falling to multi-year lows. The decline reflects disrupted supply routes and heightened geopolitical risk premiums. Analysts remain divided on the pace and extent of any recovery.
Import Decline
China's crude imports fell to 8.5 million barrels per day in June, the lowest since 2022, according to customs data. The Iran war has disrupted tanker routes through the Strait of Hormuz, which handles about 20% of global oil trade. Beijing has sought alternative supplies from Russia and West Africa, but volumes remain constrained.
Market Impact
Brent crude prices have surged above $95 per barrel, adding pressure on Chinese refiners' margins. The premium for Iranian crude, previously discounted, has evaporated as sanctions and war risks deter buyers. Chinese state-owned refineries have cut run rates by 5% since April, data from S&P Global shows.
Strategic Reserve Buildup
China's crude imports exceed Saudi Arabia's production, with significant volumes directed to strategic petroleum reserves. The exact size of these reserves remains unknown to Western analysts.
What's Next
China is expected to release July import figures in early August, which may show a modest rebound if alternative supply deals materialize. However, the duration of the Iran conflict and potential further sanctions remain key unknowns that could prolong the downturn.
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China oil imports plunge during Iran war, recovery uncertain
