(Bloomberg) — Resilient oil prices are prompting China’s refiners to keep crude purchases below the lofty levels seen before the Iran war, even as analysts and industry consultancies estimate imports are edging back toward 10 million barrels a day.
China’s buying has been a focus for analysts trying to understand oil market movements over the past months. By reducing fuel shipments and tapping ample commercial stockpiles through the worst months of the war, the world’s top oil importer helped to keep crude prices far below early, catastrophic forecasts. The question now is whether it will go back to the enthusiasm of 2025.
That may be a distant prospect.
Purchases should rise as much as 1.2 million barrels a day from the third quarter into the last three months of 2026, according to Rystad Energy, Energy Aspects and FGE NexantECA, continuing to recover as some Middle East flows resume and refinery runs increase.
Yet even the most bullish estimates put purchases at just 9.9 million barrels a day in the fourth quarter — still far below volumes of 12 million to 13 million touched last year, when China was building inventory and supporting global prices.
The most obvious factor here is price. Last year, the average crude price was below $70 — as opposed to current levels above $90, high enough to cool demand.
But there are others, including difficulties in securing the right crude. Many Chinese refineries are set up to run medium sour grades from the Middle East, where supplies remain costly and scarce. Buyers have rushed for Iraqi and Saudi barrels but received no cargoes in the latest tender awarded by Abu Dhabi National Oil Co.
Increased purchases from Brazil and Angola may not be enough to fully replace those lost flows, lost Middle Eastern flows, said Jianan Sun, an 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,” said Sun, adding domestic fuel price caps prevent refiners from fully passing higher crude costs to consumers, limiting their willingness to pay up.
Then there is the lingering question of whether some demand has disappeared entirely during the war, as more Chinese drivers switch to electric vehicles, and even trucks go green — long-running secular trends.
The good news for Beijing is that China still has a sizable buffer. Crude inventories have fallen nearly 8% from their May peak but remain at about 1.16 billion barrels across commercial and strategic reserves, according to data intelligence firm Kpler. Even just commercial stockpiles, used to absorb much of the war shock, can still provide refiners with room for maneuver.
The speed of imports will depend in part on the Strait of Hormuz, and the return of Middle East cargoes, with forecasts including those from FGE NexantECA factoring in a degree of recovery. For now, while more oil is getting through the waterway, flows are still a fraction of prewar levels.
It will also depend on the wider health of the sector. A first snapshot from China’s state-owned refiners is due from Sunday onwards, as the industry’s heavyweights report interim financial earnings, providing detail on what prices have done for fuel sales and for upstream revenue.
Sinopec will be the first to report, with earnings due on Aug. 23.
Finally, timing and scale may ultimately depend on Beijing’s view of energy security — a key priority — as the conflict in the Persian Gulf drags on. That alone could determine significant changes to inventory management and minimum stockpile requirements.
“Energy security will underpin China’s strategic response to an extended conflict,” said Lin Ye, vice president of oil markets at Rystad Energy.
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