China's State-Owned Refineries to Replenish Oil Inventories in November
Beijing is preparing to refill its crude oil reserves—which were used to counter high price volatility caused by the US-Iran conflict—by increasing them by 400,000 barrels per day from November through April.
China's state-owned refineries are expected to begin rebuilding their consumed crude oil inventories starting in November by increasing them by 400,000 barrels per day, with the aim of mitigating the impact of high prices caused by the US-Iran war.
Inventory Replenishment Process to Begin in November
According to a report prepared by Eurasia Group, China's state-owned refineries plan to add 400,000 barrels of crude oil per day to their inventories between November and April.
Changes in Beijing's Crude Oil Stock Policy
The consultancy's October 13 report stated that Beijing has centralized the management of crude oil inventories since April and extended the mandatory period that refineries must follow to replenish their stocks.
Extension of Mandatory Periods and Their Advantages
It was noted that the mandatory period required for refineries to replenish stocks has been increased from one-to-two months to three-to-five months, and this practice ensures uninterrupted supply to the domestic market during external supply disruptions.
New Purchases in Natural Gas and LNG Cargoes
China National Offshore Oil Corp. (CNOOC) has begun preparations ahead of the winter months by purchasing multiple liquefied natural gas cargoes for delivery in October and the first half of November.
Market Conditions Ahead of the Winter Season
After the Middle East war upended markets, Chinese importers find themselves under pressure to rebuild their inventories ahead of the heavy winter season, while the government restricts the resale of fuel.