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China May Refill SPR Amid Middle Eastern Tensions

OIL

China has not ruled out a small round of refilling for its strategic petroleum reserves because of the escalating geopolitical risks in the Middle East, Energy Aspects wrote in a note.

  • This is despite a previously mandated halt to refill some of its SPR by March 2024 after Chinese oil companies pushed back due to rising prices and insufficient hedged positions.
  • China’s crude inventories drew by 22mbpd month on month in September, while run rates increased.
  • But refinery runs will slow down from this month onwards amid seasonal slowdown in transport demand. Forecasts for run rates were revised down by 100kbpd for November and December, with refinery runs seen averaging 15.56mbpd in the fourth quarter.

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