Shared Analysis

China’s Refinery Runs Crash to Pandemic Lows as Crude Imports Collapse

China's National Bureau of Statistics reported refinery throughput fell 17.7% year-over-year to 12.47 million bpd in June 2026 — the lowest level since the March 2020 Covid onset — while crude imports collapsed 41.3% to 7.12 million bpd, a decade low not seen since October 2016. Refiners cited high input costs from Strait of Hormuz supply disruptions, elevated maintenance to curb losses, and weakening domestic fuel demand. This aligns with active hypotheses of ongoing U.S.-Iran conflict driving oil price spikes and reduced Middle East flows.

• Sustained low Chinese throughput raises odds of global product market tightening into Q4 2026, particularly for diesel and jet fuel, benefiting U.S. and European exporters while pressuring Asian importers.
• Accelerated Chinese diversification away from Middle East crude could entrench longer-term dependencies on Russian, Brazilian, and U.S. supplies, reshaping global crude trade flows and reducing Beijing's leverage in OPEC+ dynamics.
• Higher oil prices from the Iran blockade support U.S. energy sector revenues and defense spending replenishment but risk feeding inflation as today's CPI release is monitored, potentially complicating Fed policy into late 2026.
• If Iranian flows remain blocked, secondary sanctions on Chinese entities processing discounted Iranian crude could escalate, testing Beijing's sanctions-evasion networks and widening the U.S.-China economic decoupling.

Risk level: moderate: Supply shock meets demand weakness