China is demanding domestic oil refiners stop exporting fuel and renegotiate or cancel existing contracts as the conflict in Iran threatens the communist nation’s crude supplies.
Officials from China’s National Development and Reform Commission (NDRC), responsible for planning the nation’s economy, ordered oil executives to stop exporting refined fuel, Bloomberg reported on Tuesday. The stockpiling comes as U.S. and Israeli military forces continue strikes on Iran as part of Operation Epic Fury. China is the world’s top oil importer and one of Iran’s top trade partners, reportedly purchasing over 90% of the Islamic Republic’s crude oil between 2024 and 2025.
The communist country also imports 30% of its liquefied natural gas and 40% of its oil through the Strait of Hormuz, which Iran effectively closed at the start of the conflict. The Islamic Revolutionary Guard Corps warned that any ships belonging to Western allies “will certainly be hit,” and although the Strait remains open for China, oil tankers are beginning to avoid the conflict zone. Bloomberg reported Wednesday that three “very large crude carriers” turned away from the Persian Gulf, attempting to avoid the increasing instability in the region.
China is one of Asia’s three biggest oil exporters, shipping over 43 billion barrels of oil in 2023. Beijing exports billions of dollars worth of refined oil to countries in southeast Asia including Singapore and the Philippines, meaning a freeze on exports will likely create price instability in the region.
China’s restriction on fuel exports come as the nation is developing an developing bearish posture on its economy. The country set its lowest target for economic growth since 1991 at 4.5-5% expansion this year. Premier Li Qiang, China’s second-highest ranking official, called the situation “grave and complex,” according to CNN.
“Rarely in many years have we encountered such a grave and complex landscape,” Qiang reportedly said, “where external shocks and challenges were intertwined with domestic difficulties and tough policy choices.”
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