Chinese refiners remain upbeat amid record oil inventories

Despite the risks of possible supply disruptions, China's refineries, the largest buyers of Iranian oil, have not experienced significant challenges so far. One reason behind this resilience is the country's record-high oil reserve levels, with storage facilities holding approximately 1,180 million barrels, according to data from the analytical company Kayros.

Some of these reserves were built up by introducing new capacity, such as building storage facilities and upgrading refineries. However, due to lower fuel demand and refining margins, smaller local companies in the industry have reduced their capacity utilization to 45%, Mysteel OilChem reports.

Since these refineries have large reserves, they may not look for a substitute for Iranian oil in the short term, as noted by Energy Aspects analysts. At the same time, in the event of a complete loss of access to Iranian oil, some of these companies may be forced to reduce their refining volume, experts warn. Currently, alternative oil grades are not in high demand among Chinese companies.