China builds up oil reserves amid escalating tensions in Middle East

According to Reuters, China is building up stocks of crude oil as the country's refineries are processing less than the combined volumes of imports and domestic production. This allows the world's largest fuel importer to reduce future purchases and avoid potentially high energy prices resulting from Middle East conflicts. In May, China's crude oil surplus reached 1.4 million barrels per day, exceeding the 1 million mark for the third consecutive month.

Analysts note the country's tendency to cut imports and tap into existing reserves when global fuel prices spike. The effects of China's decisions will only become apparent in August due to the time lag between arranging supplies and their actual delivery.

According to Reuters estimates, China will reduce oil purchases and seek discounted offers from sanctioned countries, primarily Russia and Iran. Meanwhile, fuel prices have surged nearly 6% to $73.58 per barrel.