China’s crude purchase priority in a highfreight environment
As China’s refinery strategy has shifted towards revenue recovery following Beijing’s removal of transportation fuel export restrictions in late June, refiners — particularly state-run oil majors that still have substantial unused fuel export quotas — are increasingly prioritising crude cost control rather than simply maximising crude imports. As highlighted in our previous insight [last…
China's shift in refinery strategy focuses on cost control as transportation fuel export restrictions were lifted by Beijing. State-owned oil majors, still holding unused fuel export quotas, are emphasizing crude cost control over maximizing crude imports. China has returned to importing Middle Eastern crude, particularly Saudi and Iraqi medium-to-heavy grades, via short-haul routes through Hormuz, rather than relying on longer voyages.
Opting for FOB cargoes from offshore Oman STS zones, Chinese refiners have reduced the average crude voyage distance to about 3,600 nautical miles in Q3, from 4,670 nautical miles in 2025. This approach has given Chinese refiners a competitive edge in protecting refining margins, especially with elevated Asian product cracks. Despite projected Q4 export momentum, China's seaborne crude arrivals remain below seasonal norms, with around 8mbd expected in September and October.
Chinese oil majors still have sufficient onshore crude stocks to buffer against potential disruptions in seaborne supply, enabling them to maintain refinery operations into Q4 and capitalize on strong Asian product cracks through higher clean fuel exports.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.