Country Brief: China

Energy Profile

Metric	Value
Crude oil imports	~11M+ bbl/day (world’s largest importer)
Domestic production	~4.9M bbl/day
Total crude consumption	~16M bbl/day
Hormuz-dependent imports	~4.4–5.0M bbl/day (~40–45% of crude imports)
Iranian crude imports	~1.4M bbl/day (~13% of total imports; ~90% of Iran’s exports)
Russian crude imports	~1.92M bbl/day (record; largest single supplier)
Strategic reserves (SPR)	~1.2 billion barrels onshore stockpiles
SPR import cover	80–104 days of net imports
LNG imports via Hormuz	~30% of total LNG imports (from Qatar/UAE)
LNG inventories	7.6 million tons

Key Infrastructure

• Zhoushan SPR Base (Zhejiang): ~33M barrels capacity, largest single SPR site; coastal
• Dalian SPR Base (Liaoning): ~19M barrels capacity; northeast, near Russian ESPO pipeline terminus
• Zhanjiang SPR Base (Guangdong): ~20M barrels capacity (southern China)
• ESPO Pipeline (Russia): East Siberia–Pacific Ocean; ~1.6M bbl/day capacity; direct overland crude supply
• Power of Siberia Pipeline (Russia): Natural gas; 38 Bcm/year capacity (ramping); Siberian gas to northeast China
• Kazakhstan-China Pipeline: ~400K bbl/day capacity; Central Asian crude overland supply
• Myanmar-China Pipeline: ~440K bbl/day design capacity; bypasses Malacca Strait for Middle Eastern crude
• Shandong Independent Refineries (“Teapots”): ~4.5M bbl/day combined capacity; process ~25% of China’s crude; heavily reliant on Iranian/Russian discounted crude

Key Actors

• CNPC (China National Petroleum Corporation): largest state oil company; operates PetroChina; upstream/midstream dominant
• Sinopec (China Petrochemical Corporation): largest refiner; downstream dominant; major crude importer
• CNOOC (China National Offshore Oil Corporation): offshore production; LNG imports
• PetroChina: CNPC’s listed subsidiary; pipeline operator; refiner
• State Reserve Bureau (SRB): manages national strategic petroleum reserves
• Shandong teapot refineries: ~40+ independent refineries; heavily exposed to Iranian/Russian crude supply disruption

Crisis Exposure (Hormuz Closure, Day 40 — Ceasefire Active)

• 40-45% of crude imports and ~30% of LNG imports transit Hormuz; significant but not total exposure
• 55+ Chinese-flagged vessels trapped in the Persian Gulf
• YUAN-PAYMENT CORRIDOR REVOKED (Mar 28): IRGC Navy turned back CSCL Indian Ocean and CSCL Arctic Ocean (both Chinese-flagged COSCO vessels) near Larak Island. IRGC declared Hormuz “closed” citing Trump’s “false claims” that the Strait was open. The yuan-settlement toll corridor that had allowed ~20 Chinese-flagged ships to transit since Mar 13 is effectively dead
• China remains on Iran’s selective whitelist (9 countries: China, Russia, India, Pakistan, Japan, Malaysia, Thailand, Bangladesh, Philippines), but whitelist status proved meaningless once IRGC hardened the blockade. Operational access ≠ guaranteed transit
• Wang Yi: “talking is always better than fighting” (Mar 25): China’s top diplomat urged Iran toward negotiations. Beijing’s influence over Tehran remains limited despite being Iran’s largest oil customer (~90% of Iran’s exports)
• IRGC struck AWS data centers in UAE/Bahrain (Apr 3): Chinese tech exposure in Gulf now a concern alongside energy
• Suspended fuel exports (Mar 5), a conservation signal; retaining refined products for domestic market
• Pivoting to Russian crude: imports already at record 1.92M bbl/day; seeking additional volumes
• Iranian cargoes already at sea provide 4-5 month buffer of pre-loaded supply
• SPR provides 80-104 days of net import cover. Hoarding, not sharing with allies or Pakistan
• Philippines Hormuz deal (Apr 2): Iran granted toll-free safe passage for Philippine-flagged vessels and Filipino seafarers. Selective whitelist now 9 countries. ~25-30% of global seafarers are Filipino, giving the deal outsized maritime labor implications
• Ceasefire implications: Iran agreed to “safe passage via coordination with Armed Forces.” Whether China’s yuan corridor is restored under the new arrangement is unclear. China’s pre-ceasefire toll corridor was explicitly revoked; the ceasefire may create a new framework, but operational details are absent. 800+ vessels remain trapped, mines are active, and P&I clubs have withdrawn

EV Adoption & Oil Demand Dynamics

• New energy vehicle (NEV) penetration exceeded 50% of new car sales in 2025, the world’s fastest EV transition
• EV adoption displacing ~1.0–1.5M bbl/day of gasoline demand growth that would otherwise have materialized
• Net effect: China’s oil demand growth is flattening; crisis accelerates structural shift away from oil dependency
• However, diesel (trucking, construction, agriculture) and petrochemical feedstock demand remain oil-dependent. EVs do not address these sectors
• Shandong teapot refineries (~25% of China’s throughput) are most exposed: reliant on discounted Iranian crude now cut off; many lack scale/complexity to pivot to alternative grades quickly

Structural Vulnerabilities

• Must compete for Atlantic basin cargoes (West Africa, Brazil, US) if Hormuz crisis persists, bidding against Europe and other Asian importers
• Economic slowdown compounds strain. Property sector weakness and export headwinds reduce fiscal flexibility
• No leverage over Iran despite being its largest oil customer (~90% of Iran’s exports go to China). COSCO vessel turnback (Mar 28) proved this conclusively
• Shandong teapot refineries face crude quality mismatch if forced off Iranian/Russian discounted barrels
• Malacca Strait remains a secondary chokepoint for seaborne crude from Africa/Americas
• Overland oil pipelines (ESPO, Myanmar, Kazakhstan) provide partial but not full offset; combined crude capacity ~2.4M bbl/day vs ~11M bbl/day seaborne imports
• CPEC lacks oil/gas pipeline infrastructure. Gwadar-Kashgar oil pipeline shelved; no energy supply corridor to Pakistan
• LNG exposure: 30% of LNG imports from Hormuz-dependent sources; gas-fired power and heating in northern cities at risk

TankerBrief Coverage Angle

Asian commodity trading desks (Singapore/Shanghai), VLCC charterers, China-focused hedge funds, defense/intelligence analysts monitoring PLAN activity, teapot refinery operators. They need: ceasefire corridor restoration monitoring (yuan toll corridor dead since Mar 28 — will it revive?), SPR drawdown signals, Russian crude procurement volumes (ESPO loadings, Kozmino tanker tracking), Shandong teapot utilization rates, Chinese-flagged vessel movements in the Gulf (55+ trapped), fuel export ban enforcement, EV penetration impact on demand forecasts, CNPC/Sinopec/CNOOC emergency procurement strategy, and assessment of whether China’s diplomatic pressure on Iran (“talking is always better than fighting”) contributed to the ceasefire or was irrelevant.