China’s Refining Activity Slows as Crude Supply Tightens Amid Conflict

China’s refining sector experienced a slowdown last month as disruptions in global oil supply, linked to the ongoing conflict in the Middle East, began to impact operations. Refinery throughput declined by 2.2%, with daily processing averaging around 14.5 million barrels.

Fuel production also showed mixed trends. Output of gasoline and jet fuel dropped, reflecting weaker refining activity, while diesel production recorded a slight increase. The overall decline highlights the pressure on refiners due to tighter crude availability.

At the same time, China’s domestic energy production remained strong. Crude oil output reached a record level, while natural gas production also posted growth. Over the first quarter, refinery runs saw a modest increase compared to last year, supported by earlier stockpiling efforts.

However, imports of both crude oil and natural gas weakened during the month. Natural gas imports fell significantly, with liquefied natural gas shipments seeing a sharp year-on-year decline. Crude oil imports also dipped compared to the same period last year, although cumulative imports for the year remain higher due to continued stockpiling strategies.

China’s earlier efforts to build large reserves have helped cushion the immediate impact of supply disruptions, unlike many other Asian economies. Still, the country has taken a cautious approach, tightening fuel exports and managing supply carefully as uncertainties in the global energy market persist.

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