One of the surprises amid prolonged crude supply disruptions is that China’s crude oil demand has been more flexible than most people expected. The country has slashed its crude imports and refinery crude runs since the closure of the Straits of Hormuz at the beginning of March 2026. In June 2026, China’s crude imports tumbled to about 7.06 million barrels per day, a slump of 4.36 million barrels from the average in 2025.

The country has showed no eagerness to boost crude imports yet, as it has achieved a new balance between lower refined oil supply, less demand and restrained exports. This has sent market players wondering: how soon will China’s crude demand come back? What is the outlook for the country’s refined oil demand and exports?

We’ll be happy to have discussions with you about these topics at JLC’s 16th oil seminar in Singapore on September 8, 2026.

China’s bonded bunker market has seen growing fuel demand this year, because of surging foreign trade, competitive fuel prices and supply tightness in some other Asian countries amid prolonged shipping disruptions through the Strait of Hormuz. In the first six months of 2026, China’s bonded bunker fuel exports gained 8.80% on a year-on-year comparison, and exports in June hit a new high in more than six years.

Meanwhile, due to the country’s accelerating energy transition, green bunker fuels are garnering more support and momentum.

In contrast, Chinese refineries’ demand for fuel oil as feedstock has declined this year, because of bad refining margins.

The global naphtha industry chain is undergoing drastic changes because of the closure of the Strait of Hormuz which handles about 20% of global oil trade and more than half of Asia’s naphtha imports. With crude prices surging amid shipping disruptions, feedstock costs for the oil-to-olefin process jumped, hitting margins.

In China, diversified feedstock for olefin production, a system that has been built in recent years, has provided the Chinese chemical industry with a buffer from high naphtha prices. The industry has made good use of its capacity for ethane cracking and coal-to-olefin production, because of better profit margins.

China's ethylene production capacity is still expanding fast when the global ethylene production capacity is undergoing accelerated restructuring, with old and outdated capacities being shut down. Increasing capacity will push up the country’s feedstock demand further. In the meanwhile, due to the severe mismatch between high-priced naphtha and bad profit margins, the industry is accelerating the construction of the diversified feedstock system.

In 2026, volatile Middle East conflicts take a tighter grip on the supply of fossil fuels, with ripples felt far and wide. Multiple economies respond positively to hedge against risks in the traditional energy market: focusing more on green and renewable energy, accelerating their energy transitions, etc. Against this backdrop, biofuel stands out as a premium drop-in alternative to conventional fuels. China, a key supplier to the global biofuel market, garners constant interest from industry insiders on the back of its responsiveness to global dynamics, increasing supportive policies, booming SAF capacity, and thriving SAF exports.