China Tightens Refined Oil Exports Amid Global Energy Market Volatility from Middle East Conflict

Kathmandu. Amid rising instability in the global energy market due to the escalating conflict in the Middle East, news has emerged that China is prioritizing its energy security by tightening the export of refined oil products. According to Bloomberg News, Beijing has begun limiting the process of sending refined oil products such as gasoline, diesel, and jet fuel abroad.

China, considered the world's second-largest economy, is one of the largest importers of crude oil. Although China's massive refining industry primarily supplies the domestic market, it also exports refined oil products like gasoline, diesel, and jet fuel overseas. According to official customs data, China exported approximately 58 million tons of refined oil products last year.

However, due to the growing conflict tensions in the Middle East, Chinese oil refineries have started canceling some previously agreed-upon export cargoes. Bloomberg News reported this information, citing sources familiar with the matter who requested anonymity.

According to the report, the latest directive is considered even stricter than the guidance issued the previous week. At that time, a temporary halt to shipments was advised, but it was not understood as a mandatory instruction.

When asked about this matter at a regular press conference in Beijing on Thursday, Chinese Foreign Ministry spokesperson Guo Jiaqun stated that he was unaware of this report.

The global energy market has become highly volatile following the outbreak of conflict between the US and Israel in Iran. The price of crude oil in the international market surpassed $100 per barrel on Thursday. Concerns have increased about potential disruptions to energy supply due to attacks carried out by Tehran in some Gulf states.

In light of this situation, the International Energy Agency announced it would release a large volume of crude oil from its strategic reserves into the market. However, since China is not a full member of that agency, it is not obligated to participate in such joint decisions.

Meanwhile, concerns about disruptions to energy supply from the Middle East have not subsided. The Strait of Hormuz, through which nearly one-fifth of the world's crude oil supply passes, is now effectively in a state of closure.

According to analysis firm Kpler, more than half of the total crude oil China imported via sea routes last year came from the Middle East.

However, analysts suggest that China has been strategically building up large oil reserves for years, positioning it to handle potential short-term supply disruptions.

Kpler estimates that China has an onshore crude oil reserve of approximately 1.2 billion barrels. This volume is considered sufficient for about 115 days based on seaborne imports.

Previously, Beijing allowed some of its strategic oil reserves to be released into the market in 2021 after rising inflation was observed at the factory level. That decision was announced by the National Food and Strategic Reserves Administration.

However, amid the current turmoil in the global energy market, that agency has not yet announced a similar new measure.

Foreign Ministry spokesperson Guo Jiaqun stated this week that China would take all necessary steps to protect its energy security.