China has granted additional crude import quotas to independent refiners to
maintain fuel production at mandated 2025 levels amid disrupted Persian Gulf
supplies, according to people familiar with the matter. Issued before the
US–Israel–Iran ceasefire, the measure aims to secure domestic energy supply but
is not expected to improve margins as refiners face higher crude costs and
narrower discounts on sanctioned oil after US waivers expanded access. Teapots
were instructed to keep output stable even at a loss and maintain run rates for
at least a month after the Strait of Hormuz reopens. The sector, about one-fifth
of China’s refining capacity, continues to face overcapacity pressures. Analysts
cited GL Consulting noting the policy helps utilize private refiners’ import
capacity as a supply buffer, while Energy Aspects said quotas support
flexibility but many refiners remain constrained by weak margins and rely on
bonded sanctioned crude.
