China crude imports hold at eight-year lows as refineries ration runs and drain stockpiles
Beijing keeps gasoline and diesel exports flowing even as state-run runs hit record lows and demand shifts structurally.
China’s crude imports held at 7.8 million barrels per day in May, the lowest level since 2018, according to Reuters data, as state-owned refineries cut run rates to a record low of 66.3% of capacity.5 That was a 29% plunge from pre-war levels, with the Strait of Hormuz disruption removing roughly 14% of global supply since late February.3 Yet Beijing has kept gasoline and diesel exports flowing, suggesting the import collapse is not a simple demand story but a managed draw on stockpiles.
Traders have spent months trying to decode whether China’s import slump is permanent demand destruction or a tactical reserve buffer. At current ICE Brent crude prices near $98/bbl, the answer looks like the latter, but with a structural twist that could cap the upside even when the strait reopens.
State-owned Sinopec reported gasoline sales down 8% year on year in April and diesel off 6%.3 Goldman Sachs estimates that combined gasoline and related-product consumption may have fallen by as much as 20%.3 The country processed 54.65 million tons of oil in April, 11% less than March and 5.8% lower than a year earlier, the statistics bureau said on Monday (2026-05-18).1 That was the sharpest monthly drop in recent records.
The cuts were not evenly spread. Private-sector teapot refineries absorbed most of the import shortfall because they lack the crude supply agreements that keep state plants running. State firms trimmed runs to below 67% of capacity, a record low in Mysteel Oilchem data going back to 2021, to stay profitable.1 In prior supply disruptions, China ramped up processing to capture margins from product exports. This time, margins themselves are under pressure from weak domestic demand.
Beijing has been tapping its strategic reserves to plug the gap. China amassed an estimated 1.2 to 1.3 billion barrels in commercial and strategic storage before the Iran war started, according to analysts.2 Over the next few months, that draw is expected to average about 1 million bpd, based on estimates from Energy Aspects, Kpler and Vortexa.2 The country began pulling from reserves in May, three months into the Hormuz closure, in a sign it is still reluctant to pay spot premiums for prompt crude deliveries.2
Imports fell faster than run rates, forcing refiners to drain their own tanks. Rory Johnston noted on Bloomberg Odd Lots that crude imports declined far more sharply than refinery runs, meaning stocks were being used to maintain processing levels.4 That dynamic means the headline import number understates the actual crude supply available to the system.
On the demand side, the shift is not uniform. Rail travel rose roughly 10% in March and April.3 EV charging volumes surged 69% from a year earlier to a record high in April, according to the China Charging Alliance.3 That is the structural change that worries oil bulls: once the Hormuz disruption ends, imports may not snap back to 11 million bpd because electrification is permanently replacing some road-fuel demand.
Sparta Commodities senior analyst June Goh said that while structural changes could lower monthly crude imports to between 8 million and 9 million bpd after the gulf normalises, another stockpiling campaign could lift them back to 9.5 million to 11 million bpd.6 She added that Beijing will still buy incremental crude to refill strategic petroleum reserves even amid demand destruction.6 Analysts say that stockpiling could resume if ICE Brent drops below $70.6
For gasoline and diesel, the bear case is that export flows will remain steady as long as strategic stocks provide cheap feedstock to state refineries. The bull case is that once reserves hit minimum working levels, China will need to re-enter the spot market at volumes that tighten global crude balances. The unresolved risk is timing: no one outside Beijing knows how much is actually in the tanks, and the government does not publish targets or stock levels.6 Until that number becomes clear, every import data point will be read through a reserve-lens that leaves room for an abrupt reversal.