Chinese oil refiners refrain buying crude as profits fall

Bloomberg reports that China’s oil refiners are slashing crude purchases due to a decline in profits stemming from weak domestic demand. The move also comes against the background of sharp fluctuations in global oil prices and delays in adjusting diesel and gasoline prices by the local regulator.

According to the news agency’s anonymous sources, Chinese companies have cut purchases of crude from such nations as Iran and Russia. The producers who are subject to US restrictions have recently been the main suppliers for China's independent oil processors.

Data by JLC Ltd. shows that margins of these companies have dropped to their lowest in almost three months. Profits of state-owned refiners remain higher but are also trending downward.

Meanwhile, tankers around key routes of seaborne oil trade in Asia have been carrying more crude, another sign of weakening demand in China. Kpler Ltd. says some 33.9 million barrels of Iranian oil was in floating storage as of Sunday, the highest since December 2023.