1 week ago
High Oil Prices Keep China’s Crude Buying Below Past Peaks
China buys a lot of oil to make fuel and other products.
Oil is now much more expensive than it was last year.
Because of this, Chinese refineries are buying less than they did when prices were lower.
Analysts still expect imports to rise later in 2026.
However, they think purchases will remain below last year’s very high levels.
Oil supplies from the Middle East are also difficult to obtain because the war has disrupted shipping.
China has large oil reserves that can help its refineries for now.
How much China buys next may depend on prices, shipping routes and the government’s energy-security plans.
China’s crude purchases are expected to recover but remain below last year’s peak levels.
Three consultancies forecast fourth-quarter 2026 imports of up to 9.9 million barrels per day.
Oil prices above $90 are discouraging stockpiling and limiting refiners’ willingness to pay more.
Disrupted Middle East supplies are forcing buyers to seek crude from Iraq, Saudi Arabia, Brazil and Angola.
China’s inventories remain substantial at about 1.16 billion barrels despite falling nearly 8% from their May peak.
- Who
- China’s refiners, analysts and energy consultancies including Rystad Energy, Energy Aspects and FGE NexantECA.
- What
- China is keeping crude purchases below previous highs while imports are expected to recover toward 10 million barrels per day.
- Where
- China, with supply conditions affected by Middle East flows and the Strait of Hormuz.
- When
- The forecasts cover the third and fourth quarters of 2026; Sinopec is due to report earnings on Aug. 23.
- Why
- Crude prices above $90, disrupted Middle East supplies, domestic fuel-price caps and possible changes in fuel demand are limiting purchases.
Reasons imports could recover
Reasons purchases may remain restrained
Import outlook
Reasons imports could recover
Rystad Energy, Energy Aspects and FGE NexantECA expect purchases to increase, potentially reaching 9.9 million barrels per day in the fourth quarter of 2026.
Reasons purchases may remain restrained
Even the highest forecasts remain well below the 12 million-to-13 million-barrel-per-day levels seen last year.
Supply availability
Reasons imports could recover
Imports could rise as some Middle East flows resume and Chinese refinery runs increase.
Reasons purchases may remain restrained
Middle East supplies remain disrupted, and Chinese buyers have struggled to secure suitable medium-sour crude grades.
Strategic demand
Reasons imports could recover
China’s energy-security priorities could lead Beijing to adjust inventory management or minimum stockpile requirements.
Reasons purchases may remain restrained
High prices, fuel-price caps and growing electric-vehicle use may reduce the incentive or ability to rebuild inventories aggressively.
Key facts
- Current crude price
- Above $90 per barrel.
- Projected fourth-quarter 2026 imports
- Up to 9.9 million barrels per day, according to the most bullish estimates cited.
- Previous import levels
- China reached 12 million to 13 million barrels per day last year while building inventories.
- Inventory level
- About 1.16 billion barrels across commercial and strategic reserves.
- Inventory change
- Inventories have fallen nearly 8% from their May peak.
- Expected recovery
- Purchases could rise by as much as 1.2 million barrels per day from the third quarter to the fourth quarter of 2026.
- Supply disruption
- Middle East oil flows remain only a fraction of prewar levels, although more crude is moving through the Strait of Hormuz.
Quotes
Jianan Sun
Analyst at Energy Aspects
“With the prolonged war and Middle East flows still disrupted, high crude prices are preventing larger demand drivers like stockpiling from taking place”
livemint.com
“Energy security will underpin China’s strategic response to an extended conflict”
livemint.com
Sources
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