Chinese refiners largely stopped competing for Middle Eastern crude during the Iran conflict, leaving more Gulf cargoes available to Europe, India, and the rest of Asia just as traders prepared for a supply shock.
The International Energy Agency (IEA) estimates China drew 41 million barrels from crude inventories during June, one of the largest monthly stock draws on record. Refiners met domestic demand from storage instead of replacing those barrels through imports, allowing Beijing to ride out the sharp jump in Middle Eastern crude prices caused by the conflict.
That inventory was accumulated well before the conflict. The U.S. Energy Information Administration estimates China spent much of 2025 buying roughly 900,000 barrels per day for strategic and commercial storage whenever prices softened.
Independent "teapot" refiners cut operating rates as weak refining margins, slowing fuel demand and higher crude prices squeezed profitability. Reuters reported that several refiners shifted purchases toward discounted Gulf grades and delayed Iranian cargoes, leaving millions of barrels floating offshore without immediate buyers.
Kpler estimated in late May that Chinese seaborne crude imports had fallen to 6.78 million barrels per day, the lowest level in nearly a decade, down from 8.5 million bpd in April and well below the 2025 average of 10.66 million bpd. Refinery intake, however, declined far less sharply, indicating that refiners were meeting the difference by drawing inventories.
The International Energy Agency (IEA) estimates China drew 41 million barrels from crude inventories during June, one of the largest monthly stock draws on record. Refiners met domestic demand from storage instead of replacing those barrels through imports, allowing Beijing to ride out the sharp jump in Middle Eastern crude prices caused by the conflict.
That inventory was accumulated well before the conflict. The U.S. Energy Information Administration estimates China spent much of 2025 buying roughly 900,000 barrels per day for strategic and commercial storage whenever prices softened.
Independent "teapot" refiners cut operating rates as weak refining margins, slowing fuel demand and higher crude prices squeezed profitability. Reuters reported that several refiners shifted purchases toward discounted Gulf grades and delayed Iranian cargoes, leaving millions of barrels floating offshore without immediate buyers.
Kpler estimated in late May that Chinese seaborne crude imports had fallen to 6.78 million barrels per day, the lowest level in nearly a decade, down from 8.5 million bpd in April and well below the 2025 average of 10.66 million bpd. Refinery intake, however, declined far less sharply, indicating that refiners were meeting the difference by drawing inventories.
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